Gibraltar: European Parliament Elections

Baroness Hooper: asked Her Majesty's Government:
	What steps they are taking to implement the Matthews judgment of the European Court of Human Rights in order to give the people of Gibraltar their right to vote in the next elections to the European Parliament.

Baroness Symons of Vernham Dean: My Lords, we are committed to extending the European Parliament franchise to Gibraltar in time for the 2004 European Parliament elections. The Government are now seeking legislative time in order to introduce domestic legislation for this purpose. We are currently considering the detail of the legislative and practical arrangements, in consultation with the Government of Gibraltar.

Baroness Hooper: My Lords, I had been hoping for some good news today and I therefore thank the Minister for her very positive reply. To clarify the position further, will she tell the House whether this issue was on the agenda at the recent discussions between her right honourable friend the Foreign Secretary and the Spanish Foreign Minister? If so, has Spain accepted the decision of the British Government to implement the decision of the European Court of Human Rights? What is the timetable? In other words, when may we expect to see the Bill?

Baroness Symons of Vernham Dean: My Lords, I must make it clear that bringing forward this legislation is not a matter for negotiation with Spain under the Brussels process. The two issues are quite separate. The Brussels process does not impinge on this issue. After the 1999 ECHR judgment, the Government of Spain would not allow an amendment to the 1976 Act to go forward. We are therefore proceeding to domestic legislation because, although Spain's position might or might not be challengeable, there is a political commitment on the Government's part to enable the franchise to be completed in time for the 2004 elections. That might not be possible to achieve were we to try to do that outside domestic legislation.

Lord Wallace of Saltaire: My Lords, are there any plans to extend voting rights in the European Parliament elections to Britain's other two European territories; namely, the Channel Islands and the Isle of Man? I suppose it might be argued that the Isle of Man is outside the European Union as it was once part of Norway. As I understood from a remark made by the noble and learned Lord the Leader of the House some time ago, the constitutional relationship between the Channel Islands and the United Kingdom is governed by an Act of 1204 of the Crown as Duke of Normandy. It seems to me that it is rather hard to argue that the Duchy of Normandy is outside the European Union.

Baroness Symons of Vernham Dean: My Lords, the noble Lord certainly has me stumped on legislation going back to 1204. What I can tell the noble Lord is that the Channel Islands are outside the European Union and, as such, extending the European Parliament franchise to them is not possible.

Lord Howell of Guildford: My Lords, I, too, thank the Minister for her positive and detailed reply. Frankly, I was expecting the Answer to be more ambiguous and vague. I am pleasantly surprised that the Government are pressing ahead with these plans. Will the Minister tell us how the process will work? Presumably, Gibraltar is much too small to be a Euro-constituency on its own. Is the plan to annex it or append it to, say, the London bureau region or to some other southern region of the UK; and will the Gibraltarians thereby be voting with their British counterparts as part of a list of members of the European Parliament in the future? How will the process actually work?

Baroness Symons of Vernham Dean: My Lords, I am delighted that the noble Lord thinks that we are not being ambiguous and vague on this matter. Let me try to be even clearer. We began discussions with the Government of Gibraltar on this issue on 24th January. The noble Lord is right: Gibraltar, with only 16,000 on its electoral list, will not make up a European constituency on its own. So the issue is to which United Kingdom constituency or constituencies it might be linked. The Government of Gibraltar have accepted that that is the position. The discussions on this matter are proceeding. We hope to send a detailed letter to the Government of Gibraltar about the way forward before Easter, and to allow the Government of Gibraltar adequate time to consider the position and to respond to it. I hope that that gives a fairly good view of the imminent timetabling of how the exchanges are proceeding.

Lord Howe of Aberavon: My Lords, will the Minister accept that the Government have much sympathy as regards the tenacity with which they are pursuing the negotiations? I welcome the announcement that she has just made. It is important to get out of the deadlock which has prevailed for so long. Does she also recognise that, if the agreement that is to be arrived at is to have any chance of success, it must not be presented as a "take it or leave it" agreement, unsupported by good will on the part of Spain? It will be essential, if the people of Gibraltar are not to reject what might otherwise be a sensible conclusion, for the proposed agreement to be accompanied by solid, strong evidence of good faith and good will on the part of the Spanish. That must go beyond gestures—such as the granting, for example, of telephone lines without being prepared to grant recognition of the international dialling code. Will the Minister accept that it is crucial that any agreement that might result should be endorsed and accompanied by pre-emptive demonstrations of good will on the part of the Spanish Government?

Baroness Symons of Vernham Dean: My Lords, I want to make it clear that the discussions about the franchise for the European Parliament in time for the elections in 2004 are completely separate from what is happening under the Brussels process and the possibility of proposals being put forward to the people of Gibraltar in a referendum. It is essential to make clear that these are two entirely different issues—although they are both about Gibraltar and it could perhaps be argued that one may influence the other in the minds of the people of Gibraltar.
	So far as concerns the other issue—the negotiations through the Brussels process—I agree with the noble and learned Lord that any proposals that are put forward must be attractive to the people of Gibraltar. It has to go beyond gestures. I personally do not believe, as we have discussed, that telephone lines are a matter of gesture. However, there are still difficulties on the issue, because Spain has still not acknowledged the international dialling code for Gibraltar, which leaves us with a certain number of problems. These are substantive difficulties with which we are dealing—border delays and other issues of which the House is well aware. It must be made clear in the negotiations that any agreement must be sufficiently attractive to the people of Gibraltar to enable them to support it in a referendum.

Prison Education

Lord Quirk: asked Her Majesty's Government:
	What plans they have to improve the provision of education in HM prisons.

Lord Davies of Oldham: My Lords, the Prison Service and the Department for Education and Skills launched a partnership last year which created the new Prisoners Learning and Skills Unit. Its purpose is to improve the quality and quantity of education in all establishments and ensure that prisoners have the opportunity to gain the skills and qualifications to find work or pursue further learning on release. We will look at targets and funding, and at developing basic skills and other provisions. We will introduce a national quality improvement strategy to raise standards and we will support continuity of provision when prisoners leave custody.

Lord Quirk: My Lords, I take some comfort from that reply and I am grateful to the Minister. But is he aware that in our biggest prison of all, HMP Wandsworth, the otherwise attractive education unit can provide for barely 90 prisoners at a time, and, even so, is open and available for only 20 hours a week? Is not this grossly inadequate for a prison housing some 1,400 inmates?

Lord Davies of Oldham: My Lords, the noble Lord has drawn attention to pressures in the system. I recognise the point that he makes. He will appreciate that we are increasing the resources for the provision of education by 15 per cent over the next three years. That will help in providing additional facilities across the system. He will also recognise the intense pressure on the system with the increase in numbers that has occurred in recent months.

Lord Glenarthur: My Lords, is the noble Lord able to tell us the ratio of teachers to the total prison population at the moment?

Lord Davies of Oldham: My Lords, I have a swathe of statistics, but I do not have that one, so I cannot give it to the noble Lord. The only comfort that I can give him is that the intention behind the quality unit is to ensure that the provision of education reaches the same standard as that for people outside prison. Therefore, I think that I can assure him that resources will be made available to that end.

Baroness Linklater of Butterstone: My Lords, does the Minister agree that, while literacy and numeracy are fundamental to the provision of education in prison, the teaching of art, music and drama is equally important? The annual Koestler awards are but one example of the importance and the huge potential of that provision. It is all too often not available, due to its lower priority and the frequent demands of cost-cutting. Given that the idea of formal education does not appeal to the majority of prisoners, does the Minister also agree that arts education often provides a valuable gateway into more formal learning and is therefore doubly justified?

Lord Davies of Oldham: My Lords, I have considerable sympathy with the view expressed by the noble Baroness. There is no doubt that the features that she described play an important part in prison education. However, the whole House will realise that there are a disproportionate number of people with very low skill levels in prison. Some 60 per cent of prisoners do not have the skill levels that we expect of the average 11 year-old. There is little prospect of us being able to ensure that people can earn their living and fulfil their part in society after they have discharged their responsibility in prison unless they have the skills that employers will be able to use. That is why basic skills inevitably form an important part of the programme.

Baroness Masham of Ilton: My Lords, does the Minister agree that volunteers coming into prisons can do a most useful job by helping prisoners who cannot read or write? Will he pay tribute to the many volunteers and encourage that practice?

Lord Davies of Oldham: My Lords, indeed I shall. There is no doubt that the enormous progress that we have made on literacy and numeracy would never have been possible on government resources alone. They have been supplemented by an enormous amount of work by volunteers—both those working outside prisons among the general population and, as the noble Baroness rightly identified, those working with prisoners. We should pay due regard and tribute to that valuable work.

The Lord Bishop of Bristol: My Lords, is the Minister aware that when a child of school leaving age is received into prison, the prison is often not told of any information about that child's previous education? As appropriate education is important to their future, is the Minister willing to ensure that that information is passed through?

Lord Davies of Oldham: My Lords, that is an important point. We all recognise that the distressing number of juveniles who come within the framework of the custody system need particular attention. I emphasise that we are seeking to double the number of hours available for education for juveniles. That reflects the increased concentration of effort on that group. The right reverend Prelate is entirely right that we cannot improve education effectively unless we know the background of the people whom we are seeking to educate.

Lord Dearing: My Lords, is the Minister aware that a very distinguished statistician who is a Member of this House confided at No. 10 this morning that if you are in doubt about a figure, 10 per cent will usually do? I am not suggesting that the £50 million spent at present represents only 10 per cent of what is desirable, but there is a massively strong economic as well as social case for a great increase in expenditure on education in prisons for the good of all of us, as well as of the prisoners.

Lord Davies of Oldham: My Lords, I am grateful to the noble Lord for his contribution, particularly given his great background in education. I assure him that this morning's celebration by the Prime Minister of the provision of skills in this country was a reflection of our growing emphasis on the need to direct resources in that area. The noble Lord is right that education for the prison population is an important element if we are to reduce recidivism and, eventually, to reduce the costs to society in every respect.

Drivers: Experience and Age

Baroness Gardner of Parkes: asked Her Majesty's Government:
	Whether they will introduce provisional "P-plates" for newly qualified drivers and consider a requirement that drivers from the age of 70 should produce evidence of a recent satisfactory eye test when applying for the renewal of a driving licence.

Lord Filkin: My Lords, two weeks ago the Government published a consultation document Introducing a more structured approach to learning to drive, inviting views on the possible use of probationary plates by newly qualified drivers. A decision will be made in the light of that consultation on the matter raised by the noble Baroness and on the other measures consulted on.
	On renewal at age 70 and thereafter, drivers must declare any medical condition that may affect their safety to drive, including deteriorating eyesight. There is no evidence to suggest a need for more stringent measures at present, but, given its importance to safe driving, the issue is kept under constant review.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply. Does he know that during the passage of the most recent road safety legislation, the noble Viscount, Lord Brookeborough, and I were very keen on promoting P-plates or R-plates for new drivers? Northern Ireland has R-plates; Australia has P-plates. The noble Viscount produced valuable evidence from Northern Ireland and I produced a considerable amount from Australia. Since then it has become even clearer that a high number of accidents are caused by new, young drivers. It is estimated that 38,000 road users a year are killed or injured in accidents involving at least one driver with less than two years' experience. Does the Minister agree that such plates would have the great benefit of identifying such drivers so that additional speed limits could be imposed on them?
	On the issue of eyesight tests, does the Minister accept that many people are not aware of deteriorating eyesight? Now that eye tests are free again, what is there to stop people having them, particularly as the administration has to look at applications for renewal every few years? What harm would there be in that? There should be no extra expense.

Lord Filkin: My Lords, that is quite a challenge. I have noted the noble Baroness's interest in P-plates over a number of years and was advised about it in preparation. I share her concern about the relatively high accident rate among inexperienced drivers, who are usually also young drivers. The consultation paper is an excellent opportunity for the noble Baroness and others to put their evidence to the department before it comes to a view. I shall ensure that that happens. The central debate will be about the extent to which we should try to improve the experience of drivers before they take the test and the extent to which we should put conditions on drivers following the test. That is why the consultation goes into a wide range of options.
	The eyesight test is now free, although it is almost certain that there would be some charge by opticians were we to require a certificate to be produced. The core point is that there is still no evidence that older drivers—70-plus—pose a significant accident problem. They have lower accident rates than most other age cohorts, particularly—as one would expect—cohorts composed of the young. The Government believe that the current voluntary system—whereby older drivers are expected every three years to make a proper health declaration, backed by a check with their GP or a declaration by the court or insurers—seems to be working satisfactorily.

Lord Graham of Edmonton: My Lords, while considering the principle and consequences of proof of age at one end of the spectrum, will the Minister also consider proof of age at the other end? Is he aware that confusion often results when legislation and regulations rely on proof of age, as happens in many instances? Is it not time for the Government to lead the debate on a national proof of age card?

Lord Filkin: What an interesting question, my Lords. It seems almost an invitation to join the debate on identity cards, which I hesitate to do. I shall reflect and correspond on the matter.

Baroness Greengross: My Lords, given the Minister's previous statement, does he agree that many people, including many noble Lords, require glasses at a much younger age than 70? Cannot eyesight deteriorate at any time in life? Moreover, are not other qualifications, such as a person's reaction speed, necessary to be competent to drive? Would it not be sensible for the Government to consider requiring a declaration and a test proving competence to drive every 10 years during adulthood?

Lord Filkin: My Lords, I agree with the noble Baroness, Lady Greengross, that eyesight deterioration does not occur only at 70 but at a variety of ages. However, from the late 40s onwards most of us suffer some form of eyesight deterioration. It is also a fact that older drivers tend to have slower reaction speeds in a number of respects. Those facts are matched to some extent by the fact that, as noble Lords well know, older people have considerably greater judgment and experience. Older people are also inclined to be more cautious about exposing themselves to driving risks. They tend largely to avoid night-time, rush hour, winter or wet weather driving. Older drivers therefore make some fairly sensible behavioural adjustments to reduce risk.
	The Government do not support a 10-yearly test. We do not believe that the benefits that might be gained by such a process justify the amount of work and bureaucracy involved or the costs that would be imposed on individuals and the Government.

Earl Attlee: My Lords, can the Minister say what consideration is being given to compulsory retraining, as opposed to re-testing, for errant drivers?

Lord Filkin: My Lords, I think that that is available at the moment. I am sure that it is strongly encouraged in appropriate circumstances.

Beef Imports: Argentina

Lord Rotherwick: asked Her Majesty's Government:
	Whether they support the decision of the European Union Farming Commissioner to permit an increase in imports of Argentinean beef to the European Union.

Lord Whitty: My Lords, the European Commission is expected to make proposals shortly to increase Argentina's entitlement to export high-quality beef to the EU at a reduced tariff. This would apply for one year only. The Government will examine the details of the proposal when it emerges.

Lord Rotherwick: My Lords, I thank the Minister for that Answer. I should also like to declare that, although I am a farmer, I am not a beef producer. Is the Minister aware that the Office International des Epizooties does not classify Argentina as a foot and mouth-free country? Can he say whether all meat imported from Argentina comes from vaccinated cows? Furthermore, can he say whether these extra imports will increase the underlying decline in British beef production? Last year, for example, total beef imports to the United Kingdom represented 22 per cent of the total beef consumed in this country, whereas it is estimated that, this year, that figure will increase to 37 per cent.

Lord Whitty: My Lords, on the quantity side, the total amount which the Commission is likely to propose is 10,000 additional tonnes of high-quality beef. As the EU consumes 8 million tonnes of beef annually, the increase is not likely significantly to distort the EU market or the UK market—which currently takes slightly less than one-third of Argentinean imports.
	On the health side, the EU believes that all Argentina's provinces are about to be clear of foot and mouth; all but one province is clear. The north of Argentina is clear with vaccination, and the south is clear without vaccination. In practice, however, all exports from Argentina are governed by the rules applying to vaccinated meat; in other words, all beef has to be deboned and mature. Therefore, the judgment of the EU—and undoubtedly subsequently of the OIE—is that Argentina will soon be FMD free.

The Countess of Mar: My Lords, if the EU should agree to import Argentinean beef, will the British consumer be able to distinguish that beef from British beef? Will it be very clearly labelled? Will we have any choice as to whether we buy it or not?

Lord Whitty: My Lords, whether consumers buy it in the shops is a matter for them. If it is allowable in the EU, subject to all these rules, clearly it can be in the shops and the British consumer can buy it. Compared with the historical situation, British consumers are consuming a relatively small amount of Argentinean beef. As the noble Countess will know, most beef is labelled in the shops by country of origin, although that is not a mandatory requirement.

Lord Greaves: My Lords, is not the Argentine economy in a very serious—possibly disastrous—state, with unemployment at 18 per cent and increasing and the peso in freefall? The Argentine economy is forecast to contract by 8 per cent this year. In such circumstances, does not the EU—traditionally Argentina's largest overall trading partner—have some responsibility to help avoid a possible tragedy for the global economy and a certain catastrophe for the South American economy? Is it therefore not entirely reasonable to consider Mr. Fischler's proposal as a means of providing moderate but highly desirable assistance to the Argentine economy?

Lord Whitty: My Lords, yes. That is the precise reason why Commissioner Fischler has made the proposal, which is part of a much wider approach in the EU and the IMF and in the discussions in Latin America. My noble friend Lady Symons has been in discussions in Latin America on general help for Argentina on both the aid and the trade sides. The proposal is but one small part of that approach.

Lord Dubs: My Lords, is my noble friend able to say to what extent our beef exports to the EU have declined since the problems of BSE arose, and tell us which countries have provided beef to the European Union to fill that gap?

Lord Whitty: My Lords, beef exports are currently very low because of the BSE restrictions. As noble Lords know, the overall restrictions have been lifted—despite the fact that we have had some difficulty with our French friends in these matters. Nevertheless, exports are subject to very tight regulation. As only a small proportion of British beef can meet those regulations, exports to the EU are necessarily very low and there is a substantial gap. Beef to fill that gap has been found within the EU itself, but there have also been imports from third countries. There has not, however, been a significant increase in imports from Argentina. Indeed, in the past five years, overall imports from Argentina to the EU have decreased.

Earl Peel: My Lords, does the Minister agree that, despite his reply to the noble Lord, Lord Greaves, the Commissioner would be better placed dealing with the illegal position that the French are taking in the export of British beef to that country? Will he please tell us what the Government and the Commission will do to ensure that this illegality stops?

Lord Whitty: My Lords, as the House knows, the continued ban on British beef by the French was opposed by the European Court of Justice. The European Commission—not the British Government—took the case. As the noble Earl implies, the next move lies, therefore, with the European Commission. Commissioner Byrne will deal with it rather than Commissioner Fischler, who looks after the agriculture policy. Nevertheless, the ball is in the Commission's court and we shall press the Commission to take action now that it has given the French a few months to comply with the court's decision.

Lord Pearson of Rannoch: My Lords, can the Minister give the House the total tonnage of British meat that is now exported, the total tonnage of British meat that is now imported, and the percentage of the latter which depends on vaccination for its good health?

Lord Whitty: My Lords, I am not sure that I can. I have already indicated the situation with regard to British beef. In view of the FMD epidemic, it has not been possible to export British lamb and British pork during the past year. Therefore, we do not have up-to-date figures. I shall supply the noble Lord with the figures relating to imports that are subject to vaccination procedures.

Consolidation Bills: Joint Committee

Lord Irvine of Lairg: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That, pursuant to Standing Order 51, the following Lords be appointed to join with a committee of the Commons as the Joint Committee on Consolidation Bills:
	L. Acton, L. Brightman, L. Campbell of Alloway, L. Christopher, V. Colville of Culross, E. Dundee, B. Fookes, L. Hobhouse of Woodborough, L. Janner of Braunstone, B. Mallalieu, L. Phillips of Sudbury, L. Razzall;
	That the committee have the power to agree with the committee of the Commons in the appointment of a chairman;
	That the minutes of evidence taken before the committee from time to time be printed and, if the committee think fit, be delivered out; and
	That a message be sent to the Commons to propose that the Joint Committee do meet on Tuesday 30th April at half-past four o'clock.—(The Lord Chancellor.)

Lord Renton: My Lords, while supporting the Motion, I seek the assistance of the noble and learned Lord the Lord Chancellor on two matters. First, consolidation is vital to the better understanding and to the making for clarity of our statute law, but in recent years there has been too little. Therefore, I ask the noble and learned Lord to invite the committee to do more consolidation than has been undertaken in recent years.
	My second point is in relation to the penultimate phrase of the Motion. It says:
	"That the minutes of evidence taken before the committee from time to time be printed and, if the committee think fit, be delivered out".
	I may be ignorant, but I have not heard that phrase used in an official document in my 56 years in Parliament. It has a grammatical defect. At least, a few years ago, I was taught that one does not put a preposition after a verb in a phrase. If that could be altered, this Motion would be phrased in better English.

Lord Irvine of Lairg: My Lords, I entirely agree that consolidation Bills are vital for clarity. I know that sometimes it is said that there is too little consolidation. The noble Lord will recall that the noble and learned Lord, Lord Brightman, has asked questions on this subject from time to time. Although the Government believe in the importance of consolidation legislation, all governments have to give priority to the primary legislation that is required to give effect to the policies under which they were elected.
	I too was brought up in the belief that sentences should not end with a preposition, but the word to which the noble Lord refers is in the middle of a sentence and before a semi-colon.

On Question, Motion agreed to.

European Parliamentary Elections Bill  [HL]

Lord Irvine of Lairg: My Lords, I beg to move that this Bill be now read a second time. The Bill consolidates the legislation on European parliamentary elections, which currently consists of three Acts—the European Parliamentary Elections Acts of 1978, 1993 and 1999—and a number of provisions in other legislation.
	A similar consolidation Bill was introduced in the last Parliament, but it fell for lack of time because it was held up by the Political Parties, Elections and Referendums Bill, which made relevant amendments to the legislation that was being consolidated. Your Lordships may recall that that consolidation Bill received your Lordships' support. The opportunity has been taken to make one or two changes to the first Bill, in order to take account of subsequent legislation and to incorporate an amendment made to that Bill by the Joint Committee on Consolidation Bills.
	The Bill will make it easier to follow the legislation on this subject. I am aware that there are differences of opinion on the substance of the law on elections to the European Parliament, but this consolidation Bill is not the place to debate them. The Bill is simply intended to make the existing statute book clearer.
	I offer my thanks to the Law Commission and to Parliamentary Counsel for all that they do in this valuable work.
	If your Lordships are content to give the Bill a second reading, it will be referred to the Joint Committee on Consolidation Bills in the usual way. I beg to move.
	Moved, That the Bill be now read a second time.—(The Lord Chancellor.)

Lord Cope of Berkeley: My Lords, I shall not detain the House long. We all support consolidation of the patchwork of the statute book. It is important legal housekeeping, but it offers no opportunities for spin doctors and so it has had a low priority under this Government. Their record on the matter is pretty feeble. I agree with my noble friend Lord Renton.
	Any consolidation measure starts with the same welcome as the sinner that repenteth. But this rarity makes it all the more interesting to ponder why this particular part of the law has been singled out for consolidation now. I understand the background and that the Lord Chancellor has just set out the earlier efforts to consolidate this part of the law, but I have two questions for him.
	The first concerns further pending legislation on this subject. I understand that Mr Peter Hain, the Minister for Europe, has announced that on behalf of the Government he has agreed in Brussels—just before this Bill was brought forward for debate—that the Government will shortly promote more legislation on European parliamentary elections.
	We know from Mr Hain that that will include making dual membership of this Parliament and the European Parliament illegal. That is the so-called dual mandate. I understand that Members of this House or another place will no longer be able to sit in the European Parliament. Am I right in assuming that that can be done only by amending Clause 10 of this Bill, as that clause firmly provides the exact opposite of what Mr Hain has promised to achieve?
	Mr Hain says that he has agreed that this change in European election law and other changes, about which I have no information, will be ratified by the Government by the end of this year. It would be helpful if the noble and learned Lord could tell the House what changes are proposed to this legislation in order to fulfil Mr Hain's promise to our European partners and what timescale the Government propose for that legislation. Given the history of the matter, I believe that the Joint Committee will probably want to know the answer to that.
	My second question concerns the status of the new law. As we know, the 1999 Act is regarded by some lawyers as a legally dubious Act of Parliament because its passage relied on what is claimed to be the invalid Parliament Act 1949. This view is held by, among other distinguished lawyers, the noble and learned Lord, Lord Donaldson. He brought forward legislation on the subject not long ago. I realise that the Government and others do not agree with that view. I do not want to enter into that controversy today. Apart from anything else, I am not qualified to do so. There are, after all, two respectable legal views held on matters every day of the week in the courts and, generally speaking, half the laws are proved wrong every day. But this issue has not been tested.
	My question is whether this potential flaw in the 1999 legislation is carried through into the new legislation or is cancelled out by this new Bill. Can this consolidation Bill, if properly passed into law, give a greater legitimacy to the underlying legislation than it currently has? It would seem wrong for such a purpose to be achieved by means of a consolidation Bill with its special procedures. Can the noble and learned Lord the Lord Chancellor tell us whether the Bill does launder the 1999 Act in this way? One wonders whether that might be the reason that the Bill is before us now. Is it really a legal laundry Bill?

Lord Irvine of Lairg: My Lords, the noble Lord gave me no notice of either of those points which are of considerable detail. I hesitate always to give advice on any point of law, particularly since the noble Lord recognises that the law can sometimes be difficult, without attending closely to the detail of the point. I shall write to the noble Lord on the first point.
	I am, however, entirely satisfied that, even if a further amendment was required, consolidation is still desirable so that there can be a clear base from which people can work when future changes arise. But I am far from saying that any need for a future amendment will arise. I shall write to the noble Lord on the subject.
	The status of the 1999 legislation is in my view undoubted. The Bill neither adds to it nor subtracts from it.
	On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Consolidated Fund (No. 2) Bill

Lord Carter: My Lords, on behalf of my noble friend Lord McIntosh of Haringey, I beg to move that this Bill be now read a second time.
	Moved, That the Bill be now read a second time.—(Lord Carter.)
	On Question, Bill read a second time; Committee negatived.

Zimbabwe

Baroness Amos: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:
	"With permission I should like to make a statement on Zimbabwe.
	"Yesterday Robert Mugabe was declared the official winner of the presidential election. This result should surprise no one. ZANU-PF has been bent for months on achieving precisely this outcome, by any means and at all costs.
	"The Zimbabwean Government have subjected their electorate to two years of violence and intimidation. They have harassed opposition candidates and supporters, manipulated the voters' roll and restricted access to polling stations. They have exploited every instrument of the state to distort the outcome of the election—military, police, media, youth militias and the bureaucracy.
	"ZANU-PF has also done its utmost to conceal the extent of its violence and malpractice from the eyes of the world. It excluded European Union election observers, monopolised domestic TV and radio and restricted international media organisations, including the BBC. None of those was the action of a party confident of its ability to win a free and fair election.
	"These elections can only be judged by agreed international standards, not least the declaration signed by Commonwealth Heads of Government meeting in Harare itself in 1991. In December of last year, on the basis of evidence already available the Commonwealth concluded that,
	'the situation in Zimbabwe constitutes a serious and persistent violation of the Commonwealth's fundamental political values and the rule of law'.
	That conclusion was reinforced in January and again a week before the polls closed. And the situation got worse during the election itself.
	"A key yardstick by which any electoral process must be judged is impartial electoral administration. There was nothing impartial about the process in Zimbabwe. Robert Mugabe staffed Zimbabwe's electoral supervisory commission with partisan army officers. The issue of the names of who could and could not vote was not settled until just days before the election, amid allegations of fraudulent malpractice.
	"During the election itself the electoral commission reduced the number of polling booths in urban areas in order to restrict the opposition vote. In many rural areas, the opposition say their polling agents and monitors were prevented from inspecting ballot boxes before voting started. Others were not allowed inside polling stations. Many opposition workers say they were abducted, detained or arrested by supporters of the ruling party or the security forces.
	"I have today received the preliminary report of the Commonwealth observer group. It says:
	'The violence and intimidation created a climate of fear and suspicion'.
	It says:
	'Thousands of Zimbabwean citizens were disenfranchised'.
	It says there was,
	'a systematic campaign of intimidation'.
	It concludes:
	'The conditions in Zimbabwe did not adequately allow for a free expression of will by the electors'.
	I will be placing this report in the Library of the House as well as the full text of the Southern Africa Development Community parliamentary forum report, which was equally damning. The SADC delegation concluded that the,
	'election was neither free nor fair'.
	Zimbabweans have plainly been denied their fundamental right to choose by whom they are to be governed. I am sure I speak for the whole House in expressing my huge admiration for the people of Zimbabwe whose faith in democracy was so strong that they queued for days, and in the face of police violence, to vote—in some cases queued for days, only to be denied the right to vote. They are true democrats. They deserve better.
	"Zimbabwe was until recently the pride of Africa, the breadbasket of the continent. But Robert Mugabe's disastrous economic policies have already severely damaged his own country. Now there is 70 per cent unemployment, 112 per cent inflation, and a decline last year in GDP of 10 per cent. This year is expected to be the same.
	"The failure of the electoral process in Zimbabwe is a tragedy not just for Zimbabwe but for the people of southern Africa as a whole. The South African rand has depreciated by 40 per cent in the last year. The people of southern Africa deserve better too. Their governments will inevitably bear most of the responsibility for helping the region to recover. We shall continue to work with them in this task.
	"The House will know that the European Union decided on 18th February to impose sanctions targeted against the leadership of ZANU-PF. These include a travel ban, an assets freeze and a ban on arms sales. My right honourable friend the Prime Minister and I will be travelling to Barcelona this afternoon where we will review the position with our European partners at the EU summit to be held in that city.
	"We are also working closely with the US Government who have already announced a travel ban on the ZANU-PF leadership and are considering a possible broadening of sanctions along the lines of those which the EU has already enforced. We will continue to work closely with them, our G8 and SADC partners.
	"The House will know that Her Majesty's Government took the view on the evidence available at the new year that Zimbabwe should be suspended from the Commonwealth. What has happened since has simply confirmed that judgment. In the event—and we regret this—Commonwealth governments decided not to follow that course of action. They appointed a troika of South Africa, Nigeria and Australia to decide on Zimbabwe's status in the Commonwealth. We await their conclusions in light of the strongly worded Commonwealth observers report to which I have already drawn the attention of the House and of the more detailed conclusions that the report promises.
	"It is crucial that we and the international community stand by the people of Zimbabwe in the face of the deprivation and hardship heaped on them by their government. We will therefore continue our programme of humanitarian assistance and our assistance in the fight against HIV/AIDs. But I can tell the House today that we will continue to oppose any access by Zimbabwe to international financial resources until a more representative government is in place.
	"Robert Mugabe may claim to have won this election but the people of Zimbabwe have lost. We are faced here with a leader who is determined to ignore the international community, ignore his people and ignore the grave consequences of his actions.
	"Change will have to come to Zimbabwe. One day—I hope soon—we shall all look forward to a democratic government of Zimbabwe, acting in the interests of its people and taking its rightful place in a modern Africa.
	"There are those who have sought to suggest that this is a conflict between Africa and the West, black against white or the south against the north. I reject that totally. At its heart, this is a matter of universal principle—of the right of people freely to determine their own future. It is that principle which has been flouted in Zimbabwe, and all democrats should speak with one voice in condemning what has taken place".
	My Lords, that concludes the Statement.

Lord Howell of Guildford: My Lords, I am extremely grateful to the noble Baroness for repeating that important and sombre Statement. As I said at the beginning of last week's debate on Zimbabwe, we on these Benches view the situation that has emerged with sadness and anger. We view it with sadness because we see a great and prosperous country destroyed and democracy clearly brought into contempt. I fully endorse the noble Baroness's tribute to the stamina and courage of the people of Zimbabwe, who stood in long queues for many hours, intimidated and challenged, to make their democratic choice—which many of them were then denied.
	We feel sadness because the election has now officially been recognised as seriously flawed and the Commonwealth, in which I always believe strongly, has been hideously tarnished. We feel sadness also because European Union officials have been humiliated, SADC standards have been flouted in almost every respect and the whole scene for southern Africa has been darkened.
	We are angry because all that was utterly predictable, and was predicted more than two years ago. There were repeated warnings to the Government and others that we were heading towards a tragedy. The Government now use firm and tough language, which I respect—but it is late, late, late. The truth is that the quiet dialogue, which we said would not work, has been an utter failure.
	For Zimbabwe, there is probably worse to come. There is a strong whiff of the police state as gangs and armed forces hunt down defeated political opponents, then harass, arrest and imprison them—and worse. Predictable is the mealy-mouthed response from some African states, which will lead to validation and approval of what has happened from the appointed group of three. Predictable also is that the next speech from the tyrant Mugabe will probably be on the lines of reconciliation and sweet talk—about getting together and forgetting the past. That will go on even while his henchmen are closing down freedom and promoting the worst kinds of racism and hate as they did—people forget this—on a hideous scale in 1983.
	What is to be done? Having let things drift so far, what will the British Government contribute to rescue the situation? First, there must be a coalition formed of the determined democracies, including the United States of America, Denmark, New Zealand and some of the wiser African and Asian leaders. That coalition should come together and speak with one voice. It should seek to include— the most difficult task of all—a dithering South Africa whose leadership does not yet seem fully to understand the dangers that the Zimbabwe situation now threatens for that great country. The sooner South Africa understands those dangers and uses its influence, the better.
	Secondly, all possible international pressure, including financial and travel restrictions, should be put on Mugabe and his cronies. I was glad to learn that some of that is going forward, although hearing again the words "review" and "consider" fills me with unease.
	Thirdly, fresh elections should be demanded. The President of the United States does not recognise the latest elections. I would like to hear the same words from our Government. We believe that Zimbabwe should be suspended from the Commonwealth until there are new elections and a representative government in place.
	The Prime Minister's words have been well flown on two fine wings. He is quoted as saying:
	"The state of Africa is a scar on the conscience of the world. But if the world as a community focused on it, we could heal it. And if we don't, it will become deeper and angrier".
	He was right. And the Commonwealth is right in saying that its core principle is that,
	"people should be free to exercise their life choices and pursue their lawful engagements without fear of intimidation, arbitrary arrest or loss of their civil rights".
	We need not more fine-spun words and feebleness. We have words and rhetoric aplenty. We need principled and focused action, which is what we now expect from the Government.

Lord Wallace of Saltaire: My Lords, in welcoming the Statement it would be appropriate for the House to recognise the enormous efforts to mediate made by the noble Baroness, Lady Amos, in the run-up to the Zimbabwe elections. No doubt she will be much concerned with the situation over the coming weeks and months.
	What happens now in terms of British policy towards refugees and the opposition? I refer not only to those whose grandparents were born in the United Kingdom but all those people, black or white, who have shown so much courage in attempting to conduct a democratic election against overwhelming pressures from the Mugabe regime. It is important that we do not abandon those people and take only those who are white or who are, without question, entitled to residence in the United Kingdom.
	There is also a broader Africa question and a large question about the future of the Commonwealth. The Statement contains some strong language about the Commonwealth's fundamental values and universal principles. One of the reasons other Commonwealth African governments have not been strongly on our side is that they do not entirely share those universal principles or fundamental values, which is part of a broader problem. Not many African states have successfully had democratic changes of government in the past 10 to 15 years—and not many of those are Commonwealth member states.
	What does that mean for the future of the Commonwealth? Are we confident that in using such broad and idealistic language as in the Statement, we can nevertheless hold the Commonwealth together? Or must we recognise that we may be facing a breach or further weakening of the Commonwealth as an institution?
	Chaos in Zimbabwe—probably involving famine and certainly involving refugees flowing into South Africa, Mozambique and other border states—will add to chaos in a region in which the Congo and Zaire are in considerable disorder, Angola is not fully pacified and there are severe problems in Rwanda. Other states have also been involved in the Congo.
	The American Government are now preoccupied with the problems of west and central Asia. The previous American administration made it clear that they thought Africa a problem for the Europeans to deal with, while the Middle East and Eurasia were areas in which the United States led. It is important that the British Government try to focus the attention of other states within the EU and at the United Nations on the long-term problems for the world of weak states in Africa and how we rebuild not only their economies but their societies and administrations.

Baroness Amos: My Lords, the noble Lord, Lord Howell, talked about feeling sadness and anger. We all share those sentiments, although I could probably add frustration. I must admit to the House that I personally feel a great deal of frustration, having worked on these issues for many months.
	I strongly disagree with the noble Lord that our policy has been an utter failure. I considered his proposals and listened carefully to those made on Zimbabwe during the past few weeks by the Opposition spokesman on foreign affairs in another place. All that the noble Lord talked about today and what his right honourable friend suggested in another place is action that we have taken.
	We have built an international consensus. There has been strong condemnation from the European Union, leading to targeted sanctions. Strong statements have been made by the Commonwealth ministerial action group. We were disappointed that we were unable to get Zimbabwe suspended from the Commonwealth, but we were entirely realistic about that, because the Commonwealth is an organisation of 54 countries that operates by consensus. We established a mechanism to deal with the situation if the observers' report stated that the election was flawed; we must now look to the troika.
	We achieved unanimity in the European Union, which I must say, with respect to the noble Lord, would have been extremely difficult for his party if it had been in power. My right honourable friends the Foreign Secretary and the Prime Minister and I have all spoken to colleagues not only in southern Africa but across Africa about these issues and we shall continue to do so. Let us not forget that the blame here lies with Robert Mugabe. We are talking about a man and a party who care nothing for their own people. The House should not forget that.
	I thank the noble Lord, Lord Wallace of Saltaire, for his kind remarks about me. He asked what will now happen to refugees and those seeking asylum in the United Kingdom. Noble Lords will know that on 15th January, taking account of public concern, my right honourable friend the Home Secretary suspended removals until after the presidential election. I can tell the House that the Home Office has no immediate plans to recommence removals.
	The noble Lord then asked two related questions about the fundamental values of the Commonwealth and went on to raise some wider questions about what is now happening in Africa. I do not entirely share the noble Lord's views about democratic changes in Africa, because during the past two years there have been examples such as Ghana—and we hope for a peaceful transition in Sierra Leone in May. But I recognise that the shift towards democracy is fragile and vulnerable and I entirely agree that we must support those emerging democracies. Within the Commonwealth context, it is important that we talk about our shared values and beliefs. For too long, we have all assumed that those values are shared because we sign up to them. We must tackle the fact that we approach them in quite different ways. One way to do so is through the process emerging through the New Partnership for Africa's Development. The fact that within that process is a recognition that African leaders and governments must tackle issues of political and economic governance is a glimmer of hope.
	I entirely agree with the last point made by the noble Lord, Lord Wallace, about working with colleagues in the United States and other European Union countries on the issue of weak stakes, in particular, but more generally on the impact of conflict in Africa. The United States has made clear that its priority in Africa is Sudan and we hope to work closely in resolving the conflict there. Of course, we shall do all we can to ensure that the policies that we are promoting in Africa not only through the New Partnership for Africa's Development but through our bilateral relations with African countries are shared by European Union colleagues. The noble Lord will know that recently my right honourable friend the Foreign Secretary visited the Great Lakes with his French counterpart.

Lord Clinton-Davis: My Lords, does my noble friend agree that the credentials of the Opposition would be purer if they had been more consistent about Africa and its policies—especially the former apartheid regime in South Africa? Would it not be good if the invigilators could be brought together to consider the evidence of the impropriety that has been suggested—in my view, rightly? We heard today on the BBC the view of some observers that the way in which the election had been conducted was fair. I do not share that view, but will my noble friend consider calling them together so that they can take a joint view on the matter?

Baroness Amos: My Lords, I entirely agree with my noble friend's opening remarks. With respect to his question about bringing the observers together, we considered that during the run-up to the election, but it has been made difficult by the fact that the European Union delegation had to leave Zimbabwe. Strong statements have been made by the SADC parliamentary forum delegation and the Commonwealth observer team, but noble Lords will know that the South African observer team, for example, judged the election result legitimate. Given the emerging differences among different observer groups, it would now be very difficult to bring them together.

Lord Crickhowell: My Lords, the Statement referred to the Harare declaration of 1991. The noble Baroness also referred to the mechanism established at the recent conference for deciding the issue. Despite the hopeful comment in the Statement about awaiting the conclusions of the troika, are we not now in a total mess? On 6th June, the noble Baroness and the Prime Minister made it absolutely clear that the decision is to be taken by the troika, with no need to refer it to the Commonwealth heads of government. The leaders of Nigeria and the South Africa have stated clearly that they believe that the election is valid. What on earth are we now to do to rescue the Commonwealth from what appears to be a disastrous situation?

Baroness Amos: My Lords, the troika was mandated by the Commonwealth Heads of Government to make a decision on the basis of the Commonwealth observers' report. I quoted extensively from that report. That interim report will be placed in the Library of the House. It is our view that the evidence in that report is clear but we have to await the outcome of the judgment of the troika.

Lord Hughes of Woodside: My Lords, I welcome the Statement made by my noble friend Lady Amos and pay tribute to her work. Does my noble friend agree with those of us who have witnessed two elections in South Africa—the joyous people turning out to vote, the enormous lengths to which the authorities went to ensure that people did vote with ballot places open until two or three in the morning, an extension of days, and every effort made to promote democracy—that in contrast the shameful procedures in Zimbabwe bring the whole of southern Africa into disrepute? Will my noble friend take every opportunity to make sure that President Thabo Mbeki of South Africa is involved in early discussions? If the Commonwealth is not to disintegrate entirely and if Zimbabwe is not to slide into utter chaos, it is clear that this matter will have to be resolved in southern Africa. Will the Minister ensure, therefore, that President Mbeki and the presidents of Angola and elsewhere are engaged in discussions at the earliest opportunity?

Baroness Amos: My Lords, I thank my noble friend for his kind remarks. I agree with him that we need to work closely with President Mbeki and other leaders in southern Africa. Noble Lords will agree that President Mbeki carries a heavy burden. The prosperity of South Africa is affected by what is happening in Zimbabwe, but so is the prosperity of the whole region. President Mbeki has played a leading role in NePAD. He is keen to ensure that the reputation of Africa as a whole is not blighted by what is going on in Zimbabwe. I agree with my noble friend that early discussions with the South Africans are critical.

Baroness Park of Monmouth: My Lords, perhaps I may ask the Minister three questions. First, I assume and hope that an extensive aid programme will need to be carried out, whether within Zimbabwe or the countries around it. I assume that that will be a general issue within the UN, the EU and ourselves. In Sudan, the Government took over the aid and distributed it themselves for a while on their own terms. That was accepted for a time. Can we be sure that any aid mounted is monitored so that it is not possible for the Zanu-PF to use aid to strengthen further its hold and to deprive the most needy?
	Secondly, we have heard nothing about what is happening in the UN. I hope that that is an area where we shall be able to speak to Africans outside the context of the Commonwealth. Because of the split that is developing in the Commonwealth, that may be important.
	Finally, on a purely housekeeping point, I hope that the High Commission in Zimbabwe is being considerably strengthened. It will be extremely important to have immediate, detailed and reliable knowledge of what is happening as our policies are defined.

Baroness Amos: My Lords, the focus of any aid to Zimbabwe would be humanitarian assistance principally in relation to food aid. For example, we are working with the World Food Programme. Since last year we have been engaged in a supplementary feeding programme in Zimbabwe. The other two aspects of our aid programme relate to HIV/AIDS and rural development, the bulk of which is through NGOs. The noble Baroness will know that we monitor all our aid programmes because we wish to ensure that the aid goes precisely to the targets that we have identified.
	We have been in constant contact with the UN Secretary-General. The noble Baroness will know that before and since the elections he has appealed for calm. We shall continue to engage with the UN. Prior to the elections, the UNDP considered the land reform programme in Zimbabwe. Its view was that it could not proceed further given the situation on the ground.
	The noble Baroness's third point gives me the opportunity to pay tribute to our staff in the High Commission in Zimbabwe who have done a very good job indeed. I spoke to them recently. They already give us detailed and reliable information about what is happening on the ground and I am sure they will continue to do so.

Earl Russell: My Lords, can the Minister assure the House that the present policy whereby asylum seekers are not returned to Zimbabwe will continue in place unless or until Parliament is informed to the contrary?

Baroness Amos: My Lords, on 15th January the Home Secretary suspended removals. The Home Office has no immediate plans to commence removals. I am sure that we shall inform Parliament at the appropriate time.

Lord Biffen: My Lords, the entire House will sympathise with the Minister for having to bear such grievous news from southern Africa, particularly as it reinforces the compelling article in The Times today by the noble Lord, Lord Renwick.
	How will the policy of sanctions now be viewed? Is it not likely that the background for sanctions will be coloured by the action of the South African Government and other governments in southern Africa? Can we be reassured that we shall not degenerate into a policy of gesture which will have no meaning but will enable Mugabe to demonstrate his invulnerability to such action, even if it means that we have to discontinue sanctions?

Baroness Amos: My Lords, the European Union has moved to targeted sanctions: a travel ban, an assets freeze and a ban on the sale of military equipment. On the latter, it follows the United Kingdom's action in 2000. The United States has imposed a travel ban. It has made it clear that given the results of the election it will consider strengthening those areas. We have made clear that we shall not move to broader economic sanctions which we think will hurt the ordinary people of Zimbabwe. We want sanctions which are targeted on the elite.

Baroness Whitaker: My Lords, does my noble friend agree that some of the British press have not given the correct picture of the opposition of many of the democratic governments of Africa to the Mugabe victory? For instance, The Times today states that the observers from the Southern African Development Community concluded that the poll was substantially free and fair, which is absolutely not the case as the Independent reported. The Southern African Development Community observers were all parliamentarians. As my noble friend's Statement says, also the Commonwealth observers found that the election was flawed. Is it not right that the British press should give credit to those African governments who regard this as an African problem and are making fair comment about it?

Baroness Amos: My Lords, I agree with my noble friend's comments. It is important that the press report as accurately as possible. That is even more important with regard to the SADC Parliamentary Forum report.

Lord Blaker: My Lords, I shall take up the remarks made by my noble friend Lord Crickhowell and the noble Lord, Lord Hughes of Woodside. The reports of the two observer groups to which the Minister referred—the Commonwealth observers and the SADC observers—are important and surprising, given that the leaders of so many African countries have said that the election was legitimate.
	I agree with the noble Lord, Lord Hughes of Woodside, that it is important to engage with, in particular, President Mbeki and President Obasanjo, who is the other African member of the troika, which also includes Prime Minister Howard of Australia. They have both expressed the view that the election was legitimate, or words to that effect. We should urge on those leaders, in whatever manner may be most effective, the importance of their voting for stern measures against Zimbabwe. The future of the Commonwealth is at stake, and, if the troika does not support such measures, the Commonwealth will be badly damaged.

Baroness Amos: My Lords, it is important that I say to the noble Lord, Lord Blaker, that the credibility of the Commonwealth is a matter that has constantly been raised in this context. It is important that we all adhere to the principles that underlie membership of the Commonwealth and ensure that they are continued. I remind the House that the Commonwealth observers' team is led by a Nigerian.

Lord Corbett of Castle Vale: My Lords, I also congratulate my noble friend the Minister on the determined way in which she has handled the matter. Of course, the result is extremely disappointing.
	Can the Minister confirm that we need unanimity in the Commonwealth before any action can be taken? Secondly, will she, with others, renew approaches to the Government of Zimbabwe to remove the restrictions on the ability of the BBC to report events in that country?

Baroness Amos: My Lords, I can confirm that, as an organisation, the Commonwealth operates by consensus. We have urged the Government of Zimbabwe to lift the restrictions on the BBC and will continue to do so in relation not only to the BBC but to other media organisations. We think that freedom of expression is a fundamental tenet of democracy.

Lord Greaves: My Lords, I welcome the reports of the attitude of the Home Office to the removal of people to Zimbabwe at present. However, there has been considerable concern that people from Zimbabwe—black people—have been subjected to immediate detention on arrival here, in contrast to most asylum seekers, who are not detained.
	In view of the fact that people will not be returned for the time being, will the Minister have words with her colleagues in the Home Office to end the process through which people from Zimbabwe are invariably detained on arrival? Will she also take on board the concern that some people who are not being returned at the moment are, nevertheless, still being detained?

Baroness Amos: My Lords, we are in constant dialogue with colleagues in the Home Office. I will take on board the points made by the noble Lord and put them to the Home Office.

Lord Astor of Hever: My Lords—

Lord Campbell-Savours: My Lords—

Baroness Symons of Vernham Dean: My Lords, noble Lords on the Cross-Benches wanted to intervene and have not yet done so.

Lord Monson: My Lords, the Minister referred a moment ago to the freezing by the European Union of Mr Mugabe's assets. Have Her Majesty's Government any knowledge of exactly where the bulk of Mr Mugabe's assets are stashed away?

Baroness Amos: My Lords, I cannot give the noble Lord any detailed information in answer to that question. However, if there is anything that I can put in writing to the noble Lord, I shall happily do so.

Lord Astor of Hever: My Lords, to clarify totally matters, particularly in the light of the American decision, can the Minister confirm whether we will recognise Mr Mugabe's apparent victory—yes or no?

Baroness Amos: My Lords, I thought that I had made it absolutely clear in the Statement that we did not recognise the result or its legitimacy.

Lord Richard: My Lords, with great respect, I must say that we recognise states, not governments. There is no question of not recognising the state of Zimbabwe. It is there, and we have recognised it for years.
	I shall return to the election. Something that gives rise to immense frustration on all sides is how little leverage we—the United Kingdom—have. The only way in which we can influence the position is to try to persuade the countries that have influence and leverage in Harare to begin to exercise it. The key to that will be the South African Government. I hope that the Government here will quickly, immediately and vigorously try to mobilise a body of opinion that might have some effect on the attitude of the South African Government. Short of that, Mr Mugabe will not be impressed by expulsion or suspension from the Commonwealth or sanctions on some parts of his regime. He may be impressed by economic leverage from South Africa.
	It is ironic that, when Ian Smith was in charge in what was then Rhodesia, it was pressure from South Africa that, in the end, persuaded him that there should be a change of regime. I hope that history will repeat itself.

Baroness Amos: My Lords, I agree with my noble friend that we must persuade the countries with leverage to exercise it. That has been the cornerstone of our policy, and it is the reason why we have sought to work closely with SADC colleagues on the matter. Since the election, we have, of course, been in touch with colleagues in South Africa, for example, and we will continue to work closely with them and other governments in the SADC region and with other countries throughout Africa. The leverage must come from within Africa.

Banking Services: Competition Commission Report

Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by the Chancellor of the Exchequer on banks competition. The Statement is as follows:
	"With permission, Mr Speaker, in presenting the Competition Commission's report on the supply of banking services to small and medium-sized enterprises—my and my right honourable friend the Secretary of State for Trade and Industry's response to it—our starting point and guiding objective is our belief in competition as the spur to efficiency, innovation and competitiveness.
	"It is underpinned by our statement in July that, just as in the last Parliament it was right to make monetary decisions independent of political influence under an independent authority—first de facto and then by law—so too it is right to make competition decisions—de facto and then de jure—independent of political interference, with government accepting the decisions of independent competition authorities.
	"Having already moved de facto to such a regime in the way we handle merger cases, in the forthcoming Enterprise Bill we will legislate to make decisions on mergers and complex monopolies independent.
	"There are over 3.5 million small businesses in the UK, representing 55 per cent of jobs, 50 per cent of all business turnover and £1 trillion of economic activity a year. The access to finance and the quality of service they receive from banks are critically important to their—and the British economy's—productivity and prosperity.
	"So when the Cruickshank review of banking services found little prospect of effective competition emerging in the small business market, the Secretary of State for Trade and Industry and I referred small business banking to the Competition Commission for a full investigation. Its report is published and laid before the House today.
	"Under the Fair Trading Act 1973, there are three necessary tests, all of which must be met before it can be concluded that there is a complex monopoly operating that is harmful to the public interest.
	"The first test is that at least a quarter of the services under consideration must be supplied by a group of persons. The commission found that the eight largest clearing banks supplied at least a quarter of the banking services in the UK, with the four largest, in fact, providing 86 per cent of services, and that this degree of concentration had changed little over the past 10 years.
	"The second test is that this group of persons must be found to conduct its affairs,
	'as in any way to prevent, restrict or distort competition'.
	"And, finally, the third test is that the restriction or distortion of competition caused by the complex monopoly must be shown to operate against the public interest.
	"Let me set out the Competition Commission's findings. First, it finds that these banks had failed to compete on price by: refusing to pay interest on current accounts and only paying low rates of interest on smaller, short-term deposit accounts; and by maintaining a structure of charges not related to costs.
	"Secondly, it finds that these banks had reduced choice and the ability of small businesses to make savings on bank charges by: restricting small businesses to business rather than personal bank accounts; failing to inform small businesses about possible benefits from set off and sweep facilities which allow for credit balances in one account to be set off against debit balances in another; and requiring small businesses wanting a deposit account or a loan to also hold a current account.
	"Thirdly, it finds that these banks had made it hard for small businesses to compare the deals available from different banks by: failing to provide small businesses with a breakdown of interest charges on their current account; and offering discounts only to selected customers.
	"Fourthly, it finds that these banks had made it more difficult and expensive for new entrants and alternative suppliers to attract small businesses by: confining free banking to business start-ups and to small businesses who had moved from another bank; and negotiating reduced charges for small businesses who were likely to switch banks.
	"The Competition Commission concludes that all eight of the largest clearing banks in the UK were found to be carrying out one or more of those practices which operated against the public interest.
	"Moreover, the Competition Commission finds that,
	'the average return on equity between 1998 and 2000 is 36 per cent compared with an estimated cost of equity of about 15 per cent. We, however, recognised that a number of adjustments should be made to these figures . . . despite the cautious approach we have adopted to a number of those factors, we have concluded that the four largest clearing groups . . . are together charging excessive prices . . . and therefore making excessive profits in England and Wales of about £725 million a year over the last three years with adverse effects on SMEs'.
	"Profits are absolutely central to the effective and efficient working of a market economy. They are the engine in the dynamic process of competition, innovation and meeting needs of consumers. Where high profits are due to relative efficiency rather than monopoly—as the Competition Commission found in the case of Northern Bank—the question of whether high profits are against the public interest does not arise.
	"Where high profits are derived from an absence of competition or through a complex monopoly situation, and are earned by overcharging customers, the effectiveness of the market is reduced. Indeed as the Competition Commission observed: where the consumers concerned—in this case small and medium sized companies—are themselves operating in highly competitive markets, the adverse effects on the public interest are exacerbated.
	"Because practices carried out by the eight main clearing banks, and the overcharging by the four largest in England and Wales, were found to operate against the public interest, the Competition Commission recommend that all eight clearing banks identified make a number of changes to their practices to help promote competition in this market, including: being required to facilitate the switching of accounts; providing, if requested by a small or medium enterprise, a portable credit history; making the charges for their services more transparent; investigating the feasibility, costs and benefits of a national scheme for sharing branches; and extending the BBA Business Banking Code.
	"Taken together, the Competition Commission states that these remedies along with others it proposes would help promote greater competition in banking services.
	"The Competition Commission wants,
	'a decisive and significant shift towards what [they] consider to be competitive levels',
	because, as it states,
	'competition and entry has to date not been effective in reducing excess profits and prices, nor is the immediate prospect of new entry in [their] view sufficient to reduce excess profits and prices in a reasonable time period'.
	It recommends a further transitional remedy requiring the four largest banks operating current accounts in England and Wales, where evidence of excessive charges were found, to offer all small businesses one of three possible options: a current account that pays interest of at least the Bank of England base rate minus 2.5 per cent; or a current account free of money transmission charges; or a choice between the two.
	"The Competition Commission concludes that since certain current banking practices have operated against the public interest and lead to small businesses paying more than they should for services, it would be wrong to let the situation continue for several more years until the behavioural remedies to promote competition took effect.
	"From our starting point—our belief in competition as the spur to efficiency—the Secretary of State for Trade and Industry and I have considered the Competition Commission's report carefully. We have examined the recommendations and the remedies proposed to promote competition, encourage new banking suppliers to enter the market and directly address the lack of choice and information.
	"Until the competition authorities are fully independent, the Government have legal responsibility for decisions on complex monopoly cases. And in preparing the Government's response we have sought and received additional advice on the report's technical analysis and recommendations from independent experts.
	"The advice of the Director-General of Fair Trading—published today—agrees with the Competition Commission that the limited degree, and difficulty, of switching bank accounts is a key factor in inhibiting competition in the SME banking market. In his advice, that I am also publishing today, Sir Bryan Carsberg, former Chairman of the International Accounting Standards Board and ex-Director-General of Fair Trading, concluded that,
	'the framework adopted by the Commission is sound and would be accepted as appropriate by most independent experts'.
	"Like the Competition Commission, we recognise that to be robust and play their key role in the economy, it is necessary and desirable for banks, at points in the economic cycle, to make higher than average profits. But while we are pro profit, we are also pro competition and cannot be on the side of any monopoly, or any other behaviour that unfairly restricts competition in markets.
	"The Competition Commission explicitly concludes in this case that practices by banks do operate against the public interest. Having carefully considered its report, the Secretary of State for Trade and Industry and I agree that action must now be taken to promote greater competition.
	"First, the Competition Commission recommends that banks be required to facilitate the switching of accounts to enable small businesses to move accounts from one bank to another easily and quickly by completing a substantial percentage of all account switching within five working days; by publishing their performance objectives and efficiency in achieving them; and by imposing no charges for closing accounts. We agree with the commission's recommendation.
	"Secondly, the commission recommends that banks be required, if requested by a small business, to provide a portable credit history—a statement of the SME's credit performance—that can be passed to other banks and will improve the prospects for smaller competitors and new entrants into the banking sector. We agree with the commission's recommendation.
	"Thirdly, the commission recommends that banks be required to stop 'bundling' services and not impose any requirement on small businesses to hold a current account in order to obtain a loan or deposit account. We agree with the commission's recommendation.
	"Fourthly, the Competition Commission recommends that banks be required to make the charges for their services more transparent, by routinely publishing their standard tariff prices for money transmission services and interest paid on current and short-term deposit accounts allowing small businesses easily to compare charges. We agree with the commission's recommendation.
	"Fifthly, because the lack of access to a bank branch represented a key barrier to many substantial new competitors entering the market, the Competition Commission recommends banks are required to investigate the feasibility, costs and benefits of a national scheme for sharing branches and publish their findings within a year. We agree with the commission's recommendation.
	"The Julius report concluded that the principles underlying the voluntary code for banking and mortgages for households should be extended to small businesses. And so the Competition Commission also made a number of other informal suggestions, some of which are incorporated in the new code announced by the British Banking Association last week. Others, including banks improving their procedures for dealing with errors and paying compensation, the Competition Commission recommends should now be added to the code.
	"These and other remedies proposed by the Competition Commission are in pursuit of competition and we ask the banks to work with the Director-General of Fair Trading to move the recommendations forward with speed.
	"In seeking an earlier and decisive switch towards a better service for small businesses, the commission considered more radical measures including proposals for divestment of both bank branches and SME banking businesses—where banks would either be forced to give over some of their branches or some of their customers to other banks. And they considered a licence fee, an obligatory fund and a windfall tax.
	"The Competition Commission rejected these proposals, and we agree with this rejection.
	"The Competition Commission recommends a transitional remedy that is not about preventing companies earning high profits, but simply ensuring that they can only do so as a result of a genuine competitive advantage, a remedy that
	'imposes no restriction on new entrants . . . and should not interfere with the natural emergence of desirable competition'.
	"So the commission recommends, and we agree, as a transitional measure, that the four largest banks operating current accounts in England and Wales be required to offer any SME either a current account paying interest of at least the Bank of England base rate minus 2.5 per cent; or a current account free of money transmission charges; or a choice between the two. And the Director-General of Fair Trading recommends, and we agree, that we ask him to obtain undertakings from the banks to implement this remedy.
	"The commission suggests that all remedies are put in place within six months—we hope that the Director-General of Fair Trading will be able to reach an earlier agreement on the transitional remedy.
	"The commission also recommends that the Director-General of Fair Trading should review all the remedies three years after its implementation. Under the Fair Trading Act there is flexibility for a review to take place sooner.
	"We state our view that if at any time within the three years the Office of Fair Trading observes more effective competition emerging—or banks have proposals they believe would make for a more competitive environment—then an early review could and should take place.
	"Our goal is to create an environment where new entrants can compete with existing banks on a fair basis and both can secure more competitive services for small businesses.
	"I urge the banks to work with the Director- General of Fair Trading to achieve what is in everyone's interest: a better service, a fairer deal for Britain's three-and-a-half million small businesses". My Lords, that concludes the Statement.

The Earl of Northesk: My Lords, I am of course extremely grateful to the Minister for repeating the Statement. That said, I cannot let the moment pass without registering some protest and resentment. By no means do I attach opprobrium to the Minister. I cannot be certain, but he might have preferred to have had a clear run at his Employment Bill brief in Grand Committee. But the point does have to be made that we were advised that this Statement was being made at a very late hour. Indeed, my understanding is that colleagues in another place were only given 25 minutes notice.
	Following hard on the heels of the failure of the Government to offer a full Statement on the White Paper concerning economic and financial reform of the European Union, is this not another regrettable example of the Chancellor of the Exchequer's distain for due parliamentary process? I therefore suggest to the noble Lord that we would be extremely grateful if he could use his not inconsiderable influence to try to persuade his Treasury colleagues, and indeed the Chancellor, of the merits of observing the courtesies and giving adequate notice of impending Statements. Tangentially, and because I have touched on it, I also take this opportunity to iterate our expressed wish for a proper debate on the European Union reform White Paper.
	It has been suggested—and perhaps the noble Lord can confirm this—that the Competition Commission report which forms the substance of the Statement, has been gathering dust within the Department of Trade and Industry for some five months. Insofar as that is accurate, it represents an unusual delay, particularly against the background of the lightning speed with which the Chancellor has sprung his Statement on Parliament today. But in these circumstances perhaps I may ask the noble Lord whether it might not have been more helpful and beneficial to have published the report earlier to afford a period of consultation on it? In effect, does not the Chancellor's decision to publish the report in conjunction with the Government's response to it, have the effect of stifling proper and legitimate debate about its content?
	Having got those two points off my chest, I hope that your Lordships will acknowledge that in the time available it has been a herculean task to get to grips with the subject matter of the Statement. The Competition Commission report itself runs to four London-sized telephone directories. Inevitably, therefore, our analysis of both the report and the Statement to date has had to be somewhat cursory. As we delve deeper I have no doubt, therefore, that other issues and questions will arise. None the less, we note the observation from the Chancellor that,
	"Our starting point and guiding objective is our belief in competition as the spur to efficiency, innovation and competitiveness".
	Hooray to that. We have no difficulty in accepting the premise that the most important way to get a good deal for small business is via the route of competition.
	To that extent do the Government accept that notwithstanding the findings of the Cruickshank review there has already been a significant enhancement to competition in the banking sector in recent times through the entry into the small and medium-sized enterprises lending market of the likes of Abbey National and the National Australian Group?
	My understanding of the Statement is that the recommendations of the Competition Commission, as accepted by the Government, are to be focused on the biggest four banks, which cover 86 per cent of the market. Is that a correct assumption? Or is it the Government's intention that the recommendations should apply to the whole banking sector, including new entrants? In this context, too, we would welcome some clarification of the implications that the recommendations may or may not have for the proposals for the universal bank.
	We note, too, that the Government have accepted the recommendation that the banks should conduct a feasibility study about sharing branches. However, how will the Government respond should the banks decline to conduct such a study?
	As I have already suggested, we can afford to give a gentle welcome to the Chancellor's acceptance of the recommendations. As I am sure the Minister will readily accede, we need more time to study the detail of the report before we can be satisfied that the Statement is worthy of a more robust welcome. On balance, we can conclude that this does represent a reasonable step forward in furthering the interest of small and medium-sized businesses. However, it would be remiss of me if I were not to make the point that in reality it is relatively small beer when set against the tide of regulation and red tape that the Government have imposed on them: 4,642 regulations last year alone, one for every 25 minutes of every working day in the year.
	The Secretary of State for Trade and Industry, in her announcement of the publication of the report, states,
	"The Competition Commission finds that as a result small and medium-sized enterprises in England and Wales are being overcharged".
	That may be so in the banking sector. But equally we should not lose sight of the Government's own capacity, as it were, to overcharge small and medium-sized enterprises with red tape and regulation. After all, the Government—and here we on these Benches wholeheartedly agree—acknowledge the significance and importance of the small business sector both to and within the economy. To that extent it merits assistance from government, not only in respect of banking services, as announced in the Statement, but also more widely in relieving the regulatory burden.

Lord Oakeshott of Seagrove Bay: My Lords, I declare an interest as an investment manager and an employee of a British investment bank. We on these Benches wholeheartedly support the Competition Commission's report, both in its analysis of the banking services market and in its prescriptions for action. It comes as no surprise for us. We have been pointing out the problem and campaigning for a solution along these lines for the past two years. We support it strongly, but it has taken far too long for action to come.
	It seems to us that the commission has clearly established that competition between the largest banks serving small and medium-sized businesses is limited. In particular, it is very hard for such businesses to compare charges and service. The banks are also slow in practice to let their business customers use their ultimate sanction which, of course, as consumers, is to close and move their accounts. But those two things have to be done at the same time so customers and banks are in rather a different position from customers of some other services.
	We also strongly support the point made about the independence of the Competition Commission and the fact that such recommendations should be accepted without political interference. That is an important point and we strongly support that principle.
	It has been a long Statement and I do not intend to detain the House for long. However, it is right to pick out the section of the report that identified the £725 million a year excess charges that the four largest clearing banks alone had made in the past three years. The commission analysed the figures and pointed out how much the overcharging had cost customers. It is not hard to see in that case why the commission concluded that the level of pricing in this area needs a decisive and significant downward shift. The banks should not be too unhappy with the proposal that they should offer a minimum rate of interest that is no worse than 2.5 per cent less than the Bank base rate. It would not be too crippling, given that it would be 1.5 per cent on deposits today.
	Will the Minister also recognise that slow transmission of money by the banks is an effective extra charge to businesses? Time is money if there is too long a gap between charging the person sending the money and giving value to the person receiving it. I hope that that will also be taken into account.
	I end with a question. Why has it taken the Government so long to act? The problems in this area were clear when the Cruickshank report was published two years ago. Small businesses in many different sectors and different parts of the economy have been suffering badly from our extremely unbalanced economy over the past two years and they need practical help from their banks now. We welcome the report and look forward to urgent action from the Government—better late than never.

Lord McIntosh of Haringey: My Lords, I thank both noble Lords for their responses to the Statement. I start with the point made by the noble Earl, Lord Northesk, about process. I entirely reject the analysis that he has given on what happened. The usual practice with Competition Commission reports is to make no statement at all, either written or oral. The normal practice is response by press notice. We have done it this way on this occasion because the report is about an entire market of the UK economy. We emphasise the importance of small and medium-sized enterprises in the Statement itself. That is why the Chancellor and the Secretary of State felt it necessary to make a Statement to Parliament. We are often criticised for not making Statements to Parliament. As we are so often criticised for leaking and spinning Statements beforehand, I must make it clear that we are entirely fulfilling our obligations to Parliament as obviously there were no leaks or spins on this report or Statement.
	Having said that, the Chancellor is constrained by considerations of market sensitivity and by the confidentiality requirements of the Fair Trading Act. He explained that to Michael Howard and Matthew Taylor in letters this morning and, of course, he took steps to ensure that the Speaker was informed. All that we properly could and did do was to inform the banks late last night that a Statement would be made. For obvious reasons of commercial confidentiality and market sensitivity, we could not confide to anyone what would be in the Statement. All the documents, including the text of the report, were available in the Printed Paper Office at exactly the same time as they were in the House of Commons. I used to have to do this in opposition, so I appreciate that it is extraordinarily difficult to try to understand such matters in a short time. But I hope that the House will agree that proprieties in this case have been observed with great precision.
	The noble Earl, Lord Northesk, went on to say that the report had been gathering dust for five months. It certainly has not. Until we have achieved by statute the full independence of the Competition Commission, Ministers have a severe responsibility on them. Even if they are to accept all the commission's recommendations, they have to assure themselves that its analysis is soundly based and must examine the possibilities of remedy. That is why in the period between the provision of the unpublished report and today, Ministers commissioned Sir Bryan Carsberg to analyse the accounting standards in the report, which he found to be sound. They also consulted the Director-General of Fair Trading on implementation. Again, that was referred to in the report. I do not think that in those circumstances the request for earlier publication for consultation will be seen to be appropriate.
	The noble Earl, Lord Northesk, also asked whether there had been some improvement since the Cruickshank report. There may have been, but it has not affected the extreme dominance of the big four in the banking market, which is the important point. In any case the recommendations are not for the whole banking sector. The 13 behavioural recommendations are for the eight big banks and the immediate recommendation is for the big four banks who have been found guilty of excessive charging. I do not think that there is any read across to the universal bank. The noble Earl denied that his response was grudging. I would say that it was modified rapture.
	I am grateful to the noble Lord, Lord Oakeshott, for his support and agree with him entirely about the importance of making it easy to switch banks to ensure that small and medium-sized enterprises have proper banking services, which is the subject of many of the recommendations, including the 13 recommendations for the eight banks and the more informal observations. The noble Lord is right on the question of the independence of the Competition Commission, but, as I have said, until the enterprise Bill achieves that, Ministers have responsibility.
	On the question of the slow transition of money, again this is something with which we agree. It was an important part of Cruickshank's recommendations, but it applies not only to small and medium-sized enterprises but to large enterprises and personal banking. We expect action in response to Cruickshank, but we are considering a rather wider subject today. As for the time it takes to produce results, Cruickshank identified problems. The Competition Commission has identified solutions and in accepting its report those solutions are in hand.

Lord Borrie: My Lords, I welcome the Chancellor's Statement today, as distinct from a mere press release. This is a most important matter. I do not share at all the grumbles of the noble Earl, Lord Northesk, at the five months that the Government have had—if that is the right number of months—to consider the matter. I welcome, too, the Chancellor's suggestion yet again that the enterprise Bill that will be introduced will give responsibility to the competition authorities to ensure that their proposals will be carried forward and that the Government will be unable to interfere by amending or altering them—whatever the phrase is. At present, the Government have a legal responsibility to deal with those matters. Hence the five months and the proper consultation that they undertook.
	I hope that the Minister will forgive me as I have not yet read the enormous report. It looks as if the main proposals outlined by the Competition Commission are sensible and that the Government have accepted them. However, one part of the Statement worries me somewhat. I refer to the £725 million a year excess profit that has been made by the four major clearing banks for a period—I do not know for how long. All the proposals of the Competition Commission, which have been accepted by the Government, are designed to make the market more competitive in the future, and it is to be hoped that they will work. None the less, those excess profits have been made. We are informed in the Statement that the Competition Commission has not proposed a windfall tax and that the Government have agreed that there should not be one. When I get round to reading the Competition Commission report I shall no doubt see its negative reasons for that. But what are the Government's reasons for not imposing a windfall tax in the light of the clear statements about the excess profits made by the banks on the grounds described?

Lord McIntosh of Haringey: My Lords, I am grateful to my noble friend Lord Borrie for his welcome for the Statement. I shall let him into a secret—I have not read the report either. I received it as late as anyone else and I have read as much of the surrounding documentation as I can.
	My noble friend is right. The Competition Commission found, after a rather complicated accounting analysis, that the four principal banks have made excess profits of £725 million per year over the past three years. That is the period with which it was concerned. He asked why we have accepted the Competition Commission's recommendation that there should not be a windfall tax on the banks. Although there are good precedents for windfall taxes—after all, the noble and learned Lord, Lord Howe of Aberavon, imposed a windfall tax on banking profits in 1981, and so it is not unheard of even in the banking sector—we felt that, on balance, on this occasion it was more important to put matters right for the future rather than to seek penalties for the past. Small and medium enterprises are looking for action in the future.

Lord Skelmersdale: My Lords, I have declared my financial interests at the micro end of the small and medium enterprise scale many times before and I do so again today.
	The Statement refers to a transitional remedy—or, rather, four transitional parts of a single remedy. My interest lies in two of those transitional parts. As I understand the Statement, the banks are either to pay interest on SME accounts, or they are to offer a current account free of money transmission charges, or a choice between the two. From the point of view of SMEs, the result will be a trade off between cash flow and lower costs.
	Be that as it may, I am always slightly suspicious of the phrase "transitional remedy". Transitional remedies attached to Acts of Parliament and so on are sometimes of short-term duration and sometimes of long-term duration. Like everyone else, I have not read the detailed background to the Statement but I know that there is a whole string of long-term remedies. Does this mean that the transitional remedies will disappear when the long-term remedies are completely effective?

Lord McIntosh of Haringey: My Lords, I, too, should declare an interest. I have spent most of my working life owning and running a small rather than medium sized enterprise. The noble Lord's analysis of the proposed remedies is right. Their intention is to secure greater competition. The matter will be kept under continuous review by the Office of Fair Trading. It is conceivable that, if the remedies are applied as we intend they shall be, after a period of time there will be evidence of greater competition in these markets and it will be no longer necessary for this undertaking to continue. But that is some way into the future. Let us get justice for small and medium enterprises first and then look at the effectiveness of the longer-term remedies.

Lord Brooke of Sutton Mandeville: My Lords, as the banking problem in rural areas is not so much a lack of access to bank branches for new entrants to the market as a lack of access to any bank branch for banking customers at large, can the Minister say what progress has been made on enhanced facilities through post offices in rural areas, without whom this Statement about competition remains somewhat academic?

Lord McIntosh of Haringey: My Lords, I said in response to the noble Earl, Lord Northesk, that there is no read-across from the proposals for a universal bank, which are still going ahead. The idea of a universal bank—to which I think the noble Lord, Lord Brooke, is referring—is that it should offer very basic banking services, particularly for those who are without bank facilities at the present time. It is unlikely that that will apply to many of the small and medium enterprises with which the report and the Statement are concerned.
	The noble Lord is right. The reduction in the number of bank branches in rural areas is a serious problem, but as it is not seen as a competition issue the Competition Commission did not consider the matter. However, the Government are well aware of the problem and wish to see it resolved.

National Health Service Reform and Health Care Professions Bill

Lord Hunt of Kings Heath: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
	Moved, That the House do now resolve itself into Committee.—(Lord Hunt of Kings Heath.)

On Question, Motion agreed to.
	House in Committee accordingly.
	[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Ampthill) in the Chair.]

Baroness Cumberlege: moved Amendment No. 1:
	Before Clause 1, insert the following new clause—
	:TITLE3:"National Health Service Agency for England
	NATIONAL HEALTH SERVICE AGENCY FOR ENGLAND
	(1) There shall be a body corporate to be known as the National Health Service Agency for England (referred to in this Act as "the English Agency") for the purpose of carrying out the functions transferred or assigned to it by or under this Act.
	(2) The functions of the English Agency are performed on behalf of the Crown."

Baroness Cumberlege: Before I speak to my amendments, I declare an interest as a board director of Huntsworth plc, as an associate of Quo Health, as an unpaid chair of St George's Medical School, and I am involved in a number of charities, also unpaid.
	In moving Amendment No. 1, I shall speak also to Amendments Nos. 2 to 6. I do so with great optimism. I have no doubt whatever that the Minister will embrace them with the fondness of a familiar friend. In his former life as chief executive of the NHS Confederation, the Minister promoted a similar model. I am not looking backwards; I am looking forwards and seek to modernise. The purpose of the proposed new clauses is to remove politicians from the direct management of the NHS and to set up an agency for that task.
	Let me begin with a quote:
	"The public want accountability but are not very keen on the fact that the responsibility for it lies with the elected politicians, whom they don't altogether trust".
	The words are not mine but those of Mr Paul Corrigan, written only last summer, in regard to a new model for the NHS. Members of the Committee who are Whitehall watchers will know that Mr Paul Corrigan is now the special adviser to the Secretary of State—and all noble Lords will surely be aware of how special a special adviser is.
	So, with a bit of luck, I could have the support of the Minister and the Secretary of State's special adviser. Better still, I know that I have the support of the noble Lord, Lord Desai, who is an internationally distinguished economist and sits on the Government Benches. He is launching a special and important book tonight. His book contains well over 300 pages, and I am sure that it will be read in academic circles and beyond. I am grateful to him for being here today and supporting these amendments.
	I also have the support of the twin Baronesses of Llandaff, if I may call them that. Llandaff is clearly a place of great resource and sagacity. They also have put their names to these amendments. That is very important to me because the noble Baroness, Lady McFarlane, was the first professor of nursing in the UK and has been an outstanding leader of nurses, and the noble Baroness, Lady Finlay, is a medic with an international reputation in the field of cancer care. In tabling these amendments, I was anxious to obtain the support of health professionals because I believe that health professionals really know the consequences of political interference, and, of course, there is nothing more compelling than personal experience.
	It is true that politics and politicians have never been able to sustain the reputation for goodness. But political input into the NHS is, of course, necessary, since the wise men from the Treasury bring the great and essential gift of money. Therefore, political accountability is a major issue. However, politicians are handicapped. They have to run the NHS in four or five year races between elections. That in itself is incompatible with managing a huge and complex organisation. The dash to do something when targets are not met or when things seem to go awry is irresistible. As the press cuttings mount, the panic increases and another ill-thought-through initiative is directed through the system, another reorganisation of the management, as if that will solve the problem.
	As the noble Lord, Lord Clement-Jones, said at Second Reading, health Ministers have gone into initiative overdrive, and the right reverend Prelate the Bishop of Birmingham pleaded for the NHS to be left alone. That view was echoed by the former Secretary of State, the right honourable Mr Frank Dobson, who recently wrote in the February edition of the Nursing Standard:
	"Most people in the NHS don't want another round of management reorganisation. They want to be left alone . . . By the time I ceased to be Health Secretary, I realised that NHS management and staff needed more discretion to be able to respond to the varying needs of local patients, make best use of new methods of working and new equipment and play to the strengths of local clinical teams".
	I think it is sad that he did not stay a little longer.
	Effective managers know that successful change is brought about not by endless tinkering with the systems but by inspiring leadership and well-motivated staff. Real change has to be effected from the bottom up. What really matters is what doctors, nurses and managers do, how they are trained, how they are motivated, what they feel about the world; and at the moment it is not good.
	I suspect that the Minister will know from his many travels around the country that NHS managers have had to re-apply for their own jobs sometimes five or six times in 10 years. As a result, too many of the best find something better to do and leave. We are losing a whole cohort of experience, knowledge and wisdom from the NHS.
	When the NHS trusts were introduced they were an innovation; they devolved power. I remember that as a former regional chairman I considered that my most important role was to seek out the best people to chair those new trust boards and to ensure that the non-executives would make a significant input, bringing wisdom, knowledge and a wider perspective to the management of those boards. We were successful, too. We appointed the noble Baroness, Lady Hayman, to chair a trust, the noble Baroness, Lady Dean, to be a non-executive, and the noble Baroness, Lady Jay, to be a member of a health authority, to name but a few. It was very important for us to get the best people, because the chairs and the trust boards appointed the chief executive and the management team. The boards made the strategic decisions, and when things went wrong the chairs fell on their swords.
	That has now changed. Today the word "trust" is a misnomer. Trusts are not to be trusted. The trust boards do not appoint chief executives—Ministers do. When things go wrong, Richmond House sacks the chief executive by e-mail. Even the department is not trusted. Decisions are taken by the Cabinet Office special advisers, unseen people known only to the most high.
	The clauses that I move today do not further disrupt the delivery of services to patients. They do not give birth to another quango. Rather, they are there to build a new relationship between patients, politicians and NHS staff. They are about transferring one part of the organisation into a different position, transferring those powers and responsibilities.
	The amendments that I propose are mirrored in the clauses to be moved by the noble Baroness, Lady Finlay, reflecting the Welsh dimension. My first amendment inserts a new clause before Clause 1 of the Bill. That clause establishes a new corporate body, to be known as the National Health Service Agency for England, whose functions are performed on behalf of the Crown.
	The second proposed new clause sets out the composition of the agency, with 12 members, a chairman, a deputy chairman, five non-executive members and five executive members. The chairman of the agency will appoint a chief executive, the appointment to be approved by the Secretary of State. That follows the pattern of other agencies and seeks to get the commitment of both the board and the Secretary of State. Without the confidence of both those parties, the chief executive could have no hope of success. Since this body will be pivotal in managing the NHS, I have given the Secretary of State the power to prescribe its constitution by regulation.
	The third proposed new clause describes the functions of the English agency and gives power to the Secretary of State to amend the functions through affirmative regulations and to give directions on strategic matters relating to its functions. The fourth new clause concerns the transfer of property, rights and liabilities necessary for the discharge of its functions. The fifth concerns the financing of the agency and its accountability for the spending of public money. The sixth and final clause ensures that the agency is accountable to Parliament. It will be open to the committees of both Houses to scrutinise the agency's activities.
	In drawing up these clauses, I have taken a great deal of advice, and I am grateful to all those who have helped me—not least the King's Fund. However, I am under no illusion that they are probably imperfect and could be improved. Therefore, my purpose today is not to produce a blueprint but to keep the King's Fund initiative going and to instil in people's minds the fact that there is another way, a third way, a better way to run the NHS.
	This is not new territory. There are a number of models, such as the Higher Education Funding Council for England, the Medical Research Council, the Food Standards Agency, the Audit Commission, the BBC and so on, which could be adapted. Every one is unique and tailored to its purpose, but that should not prevent Ministers and the department from using their immense skills and imagination to do the same for the NHS. As the Chancellor of the Exchequer showed the nation when he gave away Treasury powers to the independent Bank of England, the political will is necessary.
	When the King's Fund produced its report, the response in the national media was amazing. The headline in the Independent, above an editorial by Donald Macintyre, was:
	"If only politicians could keep their hands off the NHS";
	in the Evening Standard,
	"Politicians are crippling NHS, warns Lord Haskins";
	and on the BBC website,
	"Ministers should stay out of the NHS".
	I could quote many more examples. This is a very popular initiative among the public. It is even more popular among those who work in the NHS.
	In summing up, I want to be fair to politicians but governments have a pretty disastrous record of managing organisations. They are poor at it because the majority of them have no experience. I exclude the Minister, who has very successfully run an organisation with a commercial element to it, but that is an exception and he is exceptional. Politicians have to work within an impossible electoral cycle, and they are nomadic. Ministers and Secretaries of State do not last, so there is no continuity. On Second Reading, my noble and learned friend Lord Howe of Aberavon told the story of a civil servant who had worked for 17 different departments for 43 Ministers, but always in the same room.
	The speed of change in medicine is a huge challenge, and change needs a robust organisation to manage it. My amendments are a first step to a separation between politics and health, to take the day-to-day management of the NHS seriously. I am not advocating a private NHS run for profit, but a competent, effective board of directors to appoint the best managers—a board that will be accountable to the Secretary of State and to Parliament; a board that will establish and run, on a day-to-day basis, an organisation that suits the needs of the health service, not the imperatives of a manifesto.
	The organisation that I am advocating is not one further to disrupt the delivery of service to patients. I ask all noble Lords, and Members of another place, to look deeply at the performance of politicians, and at the political system, as to its suitability and effectiveness in running the NHS; and to ask the following questions. Do we have a health service that befits the fourth largest economy on earth? Is the taxpayer getting value for money? Is each person getting what he or she needs from the National Health Service? After a period of introspection, perhaps we the politicians ought to have the courage to fall on our swords and leave the detailed management of healthcare to others. I beg to move.

Lord Desai: It gives me great pleasure to support the amendment moved by the noble Baroness, Lady Cumberlege, to which I have attached my name. I thank the noble Baroness for the free publicity that she gave to my book. As I explained to my noble friend the Minister, if the debate continues for a certain length of time, I may have to leave the Chamber. I am slightly more liable to be blamed there than here for what I have done—so I had better own up now.
	It is also a pleasure to participate in this debate because my political career reached its height when I was shadowing the noble Baroness in this place. Since that time I have occupied positions further and further away from the Front Bench on this side of the Chamber. That serves me right! I should add that I was present at the creation of this proposal. The noble Baroness put forward the idea at a dinner organised by the noble Lord, Lord Patel, at the Adam Smith Institute, where we freely and openly discussed the sort of problems faced by the National Health Service and what we could do about them.
	One of the better aspects of the second term of the Labour Government is that we are now engaged in a very open debate about the problems of the NHS. That is very healthy. After all this debate, we may decide to make lots, or very few, changes but we are in the process of examining it very critically. At the dinner to which I referred, the noble Baroness suggested that perhaps we should set up an independent agency to run the NHS, but—lo and behold!—the King's Fund put forward the same idea soon afterwards. That is very impressive, because my noble friend Lord Haskins, who knows a good deal about red tape, regulations and running businesses was chairing that committee at the time.
	I remember Nye Bevan saying with some pride that a clattering bedpan in any hospital should shake the Secretary of State for Health. That is the most absurd model of running a corporation that I can think of, although no doubt it was said with the best intentions. Perhaps we thought in those days that a totally centralised and totally politicised institution was the best way to run the NHS. You certainly cannot sustain that model today. That was illustrated rather tragically when we had this bit of a to-do in another place about Mrs Rose Addis, whose problems were discussed at Prime Minister's Questions and featured on national television in a manner whereby all sides seemed to be guilty. That should never have happened.
	It is, indeed, a puzzle. Food is perhaps as important as health, if not more so. If I manage to pick up half a dozen rotten eggs at a Tesco store, my MP does not have to ask the Prime Minister what he will do about it with immediate effect. Those problems are not seen to be ministerial problems; they are seen as problems that have to be sorted out in some other way. We must have reached the stage by now when we ought set up a model of the NHS, without giving up any of its fundamental core principles. As the noble Baroness emphasised, this is not a scheme to privatise or to change in any way the nature of the NHS: the object is to improve its management.
	Therefore, we need to ask ourselves whether it is now time to depoliticise the running of the health service. Obviously, politics will be in command. There would be a Secretary of State for Health to take care of the strategic thinking and the Treasury would have to provide the money, but we still need a new model. Of the new models that are available to us, I should like to commend the example of the Higher Education Funding Council. I presume that I should declare an interest at this point because, as an academic, I am a victim of the HEFC. Nevertheless, it is a good model because it receives money from the Treasury and then allocates it to higher education institutions under various clearly transparent criteria. The advantage of having such a model would be the depoliticisation of the NHS. To that extent, it would preserve the morale not only of the people who work within the health service but also—I refer back to the case of Mrs Addis—that of the patients who use the service. We should never again find ourselves in the situation where, for whatever reason, patients become political footballs.
	For me, the crucial amendments are Amendments Nos. 2 and 3. I very much admire the precision with which the noble Baroness has laid down the functions of the proposed agency. However, I should like to make one further point as regards a further function that the agency might be able to carry out—one that it would be difficult to perform under the present system. One of the major problems with the present system relates to a sense of ownership. We must give patients a sense of ownership of their National Health Service in two senses: first, they are taxpayers who provide the money for the service; and, secondly, they must take responsibility for their own health. People should take care of their health, with the help of the NHS; but, at all times, they should feel that this is something that they own.
	One of the problems with the present over-centralised and over-politicised system is that it is difficult to cultivate that sense of ownership because party politics ultimately interfere in the way in which the NHS is seen to be run. I commend the amendments to the Committee. I very much hope that my noble friend the Minister will make a very short speech and say, "Agreed".

Baroness McFarlane of Llandaff: I rise to speak to Amendments Nos. 1 to 6 standing also in the names of the noble Baroness, Lady Cumberlege, and the noble Lord, Lord Desai. I was delighted to be able to add my name to theirs.
	At Second Reading, I listened with great interest to the speech of the noble Baroness, Lady Cumberlege. It seemed to me that she was giving expression to the kind of reforms that I had been longing to hear raised throughout my experience in the National Health Service from 1948 onwards—since its inception. I then read the King's Fund report, The Future of the NHS—A framework for debate, which has previously been mentioned by the noble and learned Lord, Lord Howe of Aberavon, as it has by the last two speakers in this debate.
	Following the publication of the Government's NHS Plan, the King's Fund brought together a group of considerable expertise and wide experience—senior commentators, academics and practitioners from health and other sectors—to consider the future of the National Health Service. This diverse and experienced group worked under the chairmanship of the noble Lord, Lord Haskins. Their analysis of the problems of the National Health Service reflects my own experience in the service over the years, and I respond positively to many of their recommendations. The amendments that we have tabled would go some way to fulfilling the changes that they suggest.
	The King's Fund group identified three inter-related problems: over-politicisation of the National Health Service; excessive centralisation; and a lack of responsiveness to individuals and local communities. That confirms my experience. The report suggests that the key to these problems is enabling front-line staff, patients and the public to assert greater influence over how healthcare is managed and delivered.
	I have no doubt that, in the early clauses of the Bill, the Government seek to empower front-line staff and place their expertise at the centre of care delivery. The Bill also seeks greater public and patient involvement. I know that nurses welcome these aspirations. However, I believe that the reforms as set out in the Bill still leave the National Health Service with a political stranglehold on its day-to-day management.
	It is, of course nai ve to suggest that health could be taken out of politics. While healthcare is provided out of general taxation, there has to be a political will to allocate a budget and to set the broad strategy outlines for the health policies which express the democratic values of the day. The question is not whether the state should or should not be involved, but the nature and extent of that involvement.
	The problem with the present system is that successive governments have increasingly been drawn into the operational detail and day-to-day running of the service. The intense political pressure to achieve certain targets has resulted in anomalies such as that recently reported by the National Audit Office when it identified "inappropriate adjustments to waiting lists". I know that nursing staff, for instance, become frustrated and disillusioned when the "star rating" of their trust is reduced and they feel impotent to alter it by their own efforts. The King's Fund report states with some eloquence:
	"The dynamics of the current system draws the Government into taking responsibility for every 'dropped bedpan'"!
	In previous reforms, too much attention has been focused on reforming the structure of the NHS. We have lurched from the tripartite system of the early NHS to the many-layered district, area and regional layers of governance; to hospital trusts and primary care trusts, and the introduction of the internal market. All have been implemented without much analysis of the impact on patients and staff.
	I was a member of an area health authority prior to 1976, when I resigned to join the Royal Commission on the National Health Service. I spent three years serving on the commission examining the structure of the NHS, and every layer of staff and the way in which the service worked. More recently, I have been a member of an area health authority and chairman of its complaints committee. I am left with the feeling that we are often busy rearranging the deckchairs while the "Titanic" sinks. The emphasis on structure and adapting to successive new structures saps a great deal of the professional energy that we prize so highly in our National Health Service. The structure does little to liberate professionals to give high-quality care.
	This experience, and talking to nurses and many other health professionals, convinces me of the need to create distance between the Government and the NHS, and the need for an organisation working at arm's length from the Government. We have some notable examples of how this can work in organisations such as the Higher Education Funding Council, the Environment Agency, and the Food Standards Agency. Our amendments seek to establish a National Health Service agency for England, and—in the amendment tabled by the noble Baroness, Lady Finlay—an NHS agency for Wales. They seek also to delineate the respective functions of the agency and the Secretary of State. I commend the amendments.

Lord Clement-Jones: I congratulate the noble Baroness, Lady Cumberlege, on introducing this subject. We have already heard three notable speeches. My congratulations are not purely because the noble Baroness quoted from my Second Reading speech—although that is always very welcome.
	One of the points on which many of us agree is that the Government's scheme of devolution as set out in the Bill is inadequate. That has been pointed up in the speeches so far. The inexorable centralisation that has taken place in the NHS over the past 10 years will not be reversed by the terms of the Bill as it stands.
	We have only to look at the position of the chief executive of the NHS over the years. We had Sir Andrew Foster, followed by Sir Alan Langland, followed by Mr Nigel Crisp. If we look at the way in which each of those individuals carried out their job and the constraints to which they were subject, it is extraordinary how much more centralised the NHS became in that period and how more power has gone to the Secretary of State. The Secretary of State has progressively taken more power over the NHS, mostly in the name of performance management but also in terms of funding. That has been the case in every single area of the NHS. Discretion at local level has been reduced inexorably over time.
	A number of previous speakers have referred to the plethora of targets. The taunt which the Government like least is being accused of micro-management. But micro-management is what this Government do. As the noble Baroness, Lady McFarlane, made clear, it leads to a loss of morale. If professionals do not have a discretion to operate and are constantly subject to intervention, that leads to a loss of morale. I agree entirely that the structures proposed in the Bill will not lead to the liberation of the health professions. They will lead to more constraints. In that respect, the Bill is entirely flawed. One has only to ask the question: what will the Bill do to boost the morale of those who work in the health service? The answer is: very little, if anything. Therefore, the grounds on which the amendment is based are extremely strong.
	Clearly, any scheme of devolution of responsibility for the NHS must be genuine. The current scheme proposed by the Government actually gives more power to Ministers rather than less. On those grounds, I do not believe that it is a genuine attempt at devolution. For devolution to be effective and genuine, there need to be one or more strong, accountable bodies responsible for health service strategy, supervening between government and local delivery. There also need to be geographical entities with clear and common boundaries, which would enable joined-up strategy with a range of other public services, such as housing, education, transport, environment and social services.
	In the view of the Liberal Democrats, those conditions are clearly met by regions. When regional assemblies are created, a further benefit of accountability would be met. Regional health authorities or regional assemblies would have the critical mass to ensure sufficient expertise in specialist commissioning and public health, where the new structures in the Bill give rise to particular concern.
	That is one model. There is clearly a need for further debate. I have a great deal of regard for the work of the King's Fund and its recent report, which has been mentioned by all the previous speakers. It is a very thought-provoking piece of work, which does not necessarily exclude other regional models of organisation. In particular, its emphasis on the need for decentralisation of real power to acute trusts and PCTs is important, as is its perception that the NHS is over-politicised, too centralised and lacking in responsiveness.
	I am not yet convinced that a single, monolithic, quasi-government body is a great deal better at the top level than the one we have at present. We need to think of a more varied and diverse model. That is why I believe that we should go for the regional model. Directionally, the King's Fund report and the amendments are right. However, in addition to the structure of devolution, there needs to be a clear commitment at the same time to simplification of our structures and of our clinical governance procedures. That would help morale enormously. A great difference would be made not just by the structures, but by their quality and simplicity. On Second Reading I quoted 21 different methods of clinical governance by which health professionals are governed. We have to simplify that to make a difference.
	There is a great deal more to debate. The Liberal Democrats have made no bones about our belief that the Bill is premature in the way in which it tries to tackle current NHS structures, introducing a half-baked solution to the issue of devolution and the need to increase the morale and autonomy of professionals and managers. There is a whole debate to carry on. As I said on Second Reading, the Government should take away their structural proposals and allow that debate to continue.

Baroness Carnegy of Lour: It is not clear whether the Liberal Democrats are in favour of the amendment or of the Government's idea. The noble Lord seemed to speak in favour of both sides. Perhaps we should not be too surprised by that—I am not sure.
	I was not able to speak on Second Reading, but I listened to a lot of the debate, including the speech of my noble friend Lady Cumberlege, and I read the rest with enormous interest. There is a great deal to discuss on the Bill. My noble friend Lady Cumberlege, who moved the amendment, together with the noble Lord, Lord Desai, and the noble Baroness, Lady McFarlane, who amplified what my noble friend said so ably, have done a great service to Parliament by highlighting the root cause of the mess that the National Health Service is now in. There are many problems, but the root cause is undoubtedly that there is too much involvement of Ministers in the running of the National Health Service.
	I am told by people who work in the National Health Service—including some in Scotland, although we are not discussing Scotland—that, as one would expect, the points made by the noble Baroness, Lady McFarlane, are accurate. There is a widespread view among professionals in the National Health Service that that is the problem. People do not talk about the problem out loud because they do not know the answer and they do not want to upset Ministers, naturally. They cannot suggest anything positive, so they do not express that view.
	The King's Fund has done a great service in analysing the situation and coming up with a similar idea. I was involved in the universities during the period when they were adjusting to the fact that the Government were not dealing with them directly, but doing so through the funding council. I was also involved with further education colleges when they stopped working directly with local authorities and their funding moved to a funding council. It took a bit of time, but the effect was not far from miraculous. I am sure that the noble Lord, Lord Desai, will confirm that people at all levels began talking realistically, sensibly and responsibly about how they were spending their money and, in the case of universities, how they could preserve academic freedom within that process.
	The Scottish funding council is on such good terms with the universities that there are no complaints. Having said that, I suspect that I shall immediately get a shoal of letters, but I have noticed that the universities are really rather pleased with how the system is working. Imagine what a similar system would be like in the health service.
	The National Health Service is an enormous organisation, with 1 million employees. It is ridiculous to think that it can be run centrally. It would of course be ridiculous if an agency such as that proposed by my noble friend tried to do that. However, the agency would not have the imperative to do that. The criterion for its success would be that the National Health Service operated gradually better for patients and professionals and that everybody felt freer to run the thing in the right way. The agency would not have to be doing things every day, along the lines of Mr Blunkett's philosophy of "An initiative a day or a day wasted". That is what currently happens in the National Health Service. The system would not depend on new initiatives; it would depend on the ability of the agency to show that it had arranged things in such a way that everybody was taking responsibility better. Then it really would be possible to devolve, because there would be no pressures not to do so. The Government would have no need to be frightened, because under my noble friend's proposals the Secretary of State would be able to place constraints on the agency if he felt that he had to do so.
	The proposal should be taken very seriously as a possible way forward. The Government should not find it too difficult. Although they have not come up with the suggestion, it has clearly been rumbling around as an idea in the health service for some time. If the Minister has "Reject" written on his briefing notes, I hope that he will not follow that line, but will stand up like a very experienced man and accept that a lot of wise things have been said—not by me, but by people who know much better than I do what they are talking about—and that the idea should be followed up. I support the amendment.

Baroness Pitkeathley: I am a great admirer of the noble Baroness, Lady Cumberlege, and of the King's Fund, but I am afraid that I am not able to support the amendment. My view, which sounds heretical in the context of this debate, is that there is no getting away from the fact that the provision of healthcare is a political issue. As long as the noble Baroness and others ask questions such as, "Is the taxpayer getting value for money?"; as long as we have a health service that is funded out of general taxation, to which we are all committed; and as long as patients are represented by the political process, we cannot take politics out of the NHS. At least we cannot depoliticise the strategy of the NHS. We can, however, depoliticise the running of the NHS.
	The Bill offers us the opportunity to do that because of its emphasis on primary care and putting most of the power at primary care level. We have been saying for years that power in the NHS should be as near as possible to the patient and his or her family. I think that the Bill will do that. Primary care trusts will make it much more possible than ever before to achieve the sense of ownership that the noble Lord, Lord Desai, described, and to help patients become more responsible for their own health. The "inexorable centralisation of the NHS" described by the noble Lord, Lord Clement-Jones, also can be dealt with by devolving power to primary care trusts, where patients will have much greater access and much greater control. That is also what the NHS professionals want. Nowadays, whenever one speaks to NHS professionals, almost all of them—with the exception of one or two old pockets of resistance—say that the real emphasis must be on what patients want. As that is what the professionals want, I think that the proposals will deliver both improved morale and improved delivery.
	I have one other concern about the amendment. I hope that, as we make progress on the Bill, because it is an NHS reform Bill, we shall not forget that the NHS is inextricably intertwined with the provision of social care by local authorities and others at local level. Although the point is made explicitly in the unfortunate term "bed blocking", it obviously also arises before the patient is admitted to hospital. In addition to health care provision, social care provision is enormously important. I do not know how the amendment would address that issue, which remains a concern for me. I oppose the amendment.

Earl Howe: My noble friend Lady Cumberlege is to be congratulated on presenting us with such a well-argued set of proposals at the start of our Committee proceedings. I venture to say that few former health Ministers on these Benches command greater respect in the House than she does, and I have no doubt that that respect will extend in full measure to her speech today. For my part, I thank her for steering us towards some extremely interesting and fruitful debating territory.
	It seems to me that we can best approach that territory by looking back at recent NHS history. In my lifetime, a succession of structural changes has been imposed on the NHS by governments of both parties. In the 1960s, we had Labour's grand design to rationalise the structure of the NHS under single administrative authorities. We then had the Crossman White Paper of 1970 which proposed an entirely new plan for integrated health services under fewer, larger health authorities. Under the Heath government, we had Keith Joseph's White Paper which proposed 15 regional health authorities above the 90 area health authorities proposed by Crossman. In 1982, the 90 area health authorities were replaced by 200 district health authorities to facilitate better planning and provision of health services at a local level. And so it went on. The aim of all those reforms was the same: to improve the delivery of healthcare to the patient, and to make the system as a whole more co-ordinated and cost-effective.
	The language used nowadays may be slightly different from that of the 1960s and 1970s, but in essence the aim of the new reforms set out in this Bill is absolutely identical. I think that the Government would do well to learn a lesson or two from the past. When it comes to health service reform within the existing Bevanite model, there is really nothing new under the sun. We have been here before. Consequently, we have to ask ourselves a rather obvious question. If past reorganisations of the model have not been entirely successful, why should this latest reorganisation fare any better? We are told that—as the noble Baroness, Lady Pitkeathley, has reminded us—the difference this time is the devolution of 75 per cent of the NHS budget to local level. I have serious doubts about the credibility of that claim. However, because I do not want to anticipate our later debates on PCTs, I shall simply say for now that, after so many reorganisations, over decades, it is at least open to question whether the problem facing us in the NHS is not so much the balance of power within the system as the very nature of the system itself.
	It is of course the pursuit of that line of thought that has prompted my noble friend Lady Cumberlege to table her amendment. Within a nationalised monopoly, we can shift the balance of power all we like, but at the end of the day it is still a nationalised monopoly. Genuine devolution of power would take politicians out of the driving seat and put patients and doctors in their place. I agree entirely with the noble Lord, Lord Clement-Jones, that, for all the Government's claims to the contrary, this Bill does not do that. Ministers will retain as much power, if not more, to influence the delivery of healthcare as they have ever had in the past.
	The Government, understandably perhaps, are sensitive to the suggestion that they have micro-managed the health service. But how else are we to describe the multitude of politically inspired targets imposed on the NHS since 1997? I readily admit that that has happened not just since 1997, but the practice has been put into much sharper focus in recent years. I have no doubt that these targets are, in their own way, well meant. The trouble is that they tend to distort strict clinical priorities. The sickest patients find that they are waiting longer than they should because of the need to treat fewer sick patients within an imposed deadline. Wheels are taken off trolleys so that they are no longer trolleys but beds. The BMA has described the situation as follows:
	"Artificial targets imposed on an overstretched service cannot be met without resorting to ingenious massaging of the figures. It does not fool, nor does it help patients".
	Perhaps the most damning recent criticism has come from the former chief executive of the NHS Confederation, Stephen Thornton, who told his annual conference last year that,
	"Labour has embarked on measures to tighten the grip of central control of the service, motivated by a desire to end unacceptable local variations, which has had the unintended consequence of disempowering many at the front line".
	Of course, as a number of noble Lords have said, that affects morale—which is a point not so far removed from that very well made by the noble Lord, Lord Desai, about the need for a sense of ownership in the health service. In October 2001, the NHS Confederation went on to complain that "target fatigue" was setting in, so numerous were the targets that the Government were setting.
	I would be the first to applaud if I felt that the Bill was going to change that situation. I would be the first to welcome a set of proposals that offered the prospect of genuine empowerment of patients and of doctors as patients' advocates. However, the essential structure of the health service will remain unaltered—based, as it always has been, on centralised, top-down control, with extensive powers residing with the Secretary of State. Political appointments will continue. This type of centralised management, although motivated by a worthy desire for uniformity and fairness, costs a very great deal of money. The highest percentage growth in NHS staff in the past five years has not been in doctors or nurses, but in managers. There is a price to be paid for the NHS in terms of bureaucracy and, therefore, of efficiency. The system wastes money. In a service that, throughout its life, has been under-funded, that is a heavy price to pay.
	My noble friend's proposition that we should set the health service free from politicians is not new, as she acknowledged. Nor is it free from intellectual hurdles: principally the need to ensure that ministerial accountability to Parliament is preserved to an extent that is balanced and meaningful and, if an NHS agency existed, it would need to avoid the very centralisation and bureaucracy that the present system tends to embody.
	The scale of the difficulties in the NHS makes this an opportune moment to revisit the ideas that my noble friend has set out so well and to examine their implications; not least as a backdrop to this important Bill. I hope that in introducing her amendment, my noble friend will have started a debate that will continue to run in and outside this Chamber among politicians of all parties. It deserves our full attention and engagement.

Lord Hunt of Kings Heath: This has been an interesting and high quality debate. I am sure that we are all grateful to the noble Baroness, Lady Cumberlege, for introducing a subject which, in terms of the balance between local and central, will permeate throughout the debates on the Bill. She has had a distinguished career in the National Health Service and as a health service Minister. From my own experience in the NHS and in the Department of Health for nearly three years, I certainly accept that micro-management of the health service from Whitehall is not sensible or feasible.
	I read the King's Fund report with great interest, and there is much in it that I support and commend to the Committee. However, there are some serious issues that need to be put before your Lordships in relation to the specific proposal that the noble Baroness has put before the Committee. I understand the desire to prevent the NHS from becoming what is often termed "a political football". Over many years, several ideas have been put forward of ways in which to organise the NHS to lessen the degree of political influence in the running of the health service. The noble Baroness, Lady Cumberlege, even referred to a paper that I wrote some years ago on this subject. However, that was before I had had the benefit of the extensive re-education provided for me by my officials at the Department of Health. The idea has always been the same: to improve the quality of NHS management by removing it from over-extensive political control. My noble friend Lord Desai, who attached his name to the amendment, is shortly to launch his book entitled Marx's Revenge!
	As ever in such matters, I prefer to turn to Bevan and Morrison for encouragement and advice on the balance between the centre, the department, Parliament and the local National Health Service. If one refers back to the extensive debates of the post-war Labour government, one sees the arguments of Morrison, who championed the cause of local government and wanted the NHS to be a local authority service, and Bevan, who rejected that by saying that he thought that such a service would be patchy, and that there would be great inequalities. In a sense, a compromise emerged of a national service run through locally appointed boards. However, as the noble Earl, Lord Howe, pointed out, many changes are taking place to the structure, but essentially that is the model with which we are still running the National Health Service. It is certainly true that over the years there have been many debates as to whether that is appropriate.
	As early as 1956, the Guillebaud committee considered this issue. That was a very good report into the financing of the health service. It came to the conclusion that creating a special corporation to run the NHS was flawed. The committee said that,
	"The exact relation of this proposed body . . . to its minister has never been defined, and it is here that the crux lies. If, in matters both of principle and detail, decision normally rested in the last resort with the minister, the body would in effect be a new department of government . . . if, on the other hand, certain decisions were removed from the jurisdiction of the Minister (and consequently from direct parliamentary control) there would be need to define with the utmost precision what these decisions were. Clearly they could not include major questions of finance. Nor could any local government authorities responsible for local planning or administration reasonably be asked to submit to being over-ruled by a body not answerable to Parliament".
	The noble Baroness, Lady McFarlane, was a distinguished member of the 1979 Royal Commission. Again, the matter raised by the noble Baroness, Lady Cumberlege, was discussed. It said:
	"The establishment of an independent health commission or board to manage the NHS was one of the solutions most frequently advocated in evidence. There are a number of possible models including the British Broadcasting Corporation, the Post Office, the University Grants Committee and the Manpower Services Commission".
	The commission's conclusion echoed that of Guillebaud. It said:
	"The very large sums of public money required by the NHS would . . . make some continued parliamentary supervision inevitable. Parliament would, as now, be involved in legislation, the provision of funds and securing financial accountability. The Secretaries of State and the health departments would continue to have major functions, for example in appointing the commission's chairman and members, negotiating the appropriate level of funding and setting priorities and objectives. A commission might act as a buffer between the NHS and Parliament but the NHS would remain dependent on the willingness of Parliament to vote funds. The effect, therefore, might be to duplicate functions that at present are carried out, however unsatisfactorily, by the health departments and the top tier of health authorities".
	In 1983, Sir Roy Griffiths, in his writings, came to a similar conclusion:
	"A case could be made for an independent corporation . . . This has a variety of defects, not least that one would have to formalise unnecessarily the role of the corporation vis-à-vis the Secretary of State, which would be extremely difficult in such an intensely politically sensitive operation".
	The Griffiths report was highly significant in reaching that conclusion because the logic of all that Griffiths wrote in relation to general management was that there should be a separation between the NHS and the Department of Health. None the less, Roy Griffiths, whose expertise I believe has been unequalled in terms of analysing the issues of management in the health service, came to the conclusion that the kind of independent corporation proposed by the noble Baroness was, in the end, untenable.
	My understanding is that the final review that took place was an internal review by Terry Banks in 1994—a functions and manpower review. As a result of that the then Secretary of State in the previous government reached a similar decision. I say that not to dismiss out of hand the proposals put forward by the noble Baroness, Lady Cumberlege, because I fully understand and sympathise with where she is going. It is of great interest that all those notable reviews and committees started out sympathetic to the notion, but in the end came to the conclusion that it is not practical to go down that route.
	One problem is that those who advocate the removal of the NHS from the political arena have never satisfactorily explained how proper political accountability would be maintained.
	There is another reason why one should view this proposal with a great deal of caution. Both the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, have hinted at it. There is no guarantee that removing the NHS from the purview of ministerial control would remove the risk of over-centralisation. Given that what is proposed is essentially a public corporation, experience over the past 50 years suggests that they tend to be highly centralist. That is not the route down which the Government wish to go.
	The noble Baroness, Lady McFarlane, spoke eloquently of the need to take the NHS out of politics. The noble Lord, Lord Clement-Jones, spoke about the risks of centralisation. He did not speak about the impact of parliamentary scrutiny on the oversight and management of the National Health Service. The noble Lord, in his distinguished career as the Liberal Democrat spokesman on health, has asked many questions. He has made many suggestions of decisive firm action that the Government should take in managing the health service. I have yet to hear him ask a question seeking to remove a target or suggest that the department does not set a policy in a particular area. That applies to many noble Lords who speak in our debates on health. The emphasis of scrutiny in your Lordships' House is to press the Government to take further action, to set further targets—

Lord Clement-Jones: Is not the fact that more and more powers are taken by Ministers in this Government precisely the reason why many Members of this Chamber, including myself, are keen to question the Minister?

Lord Hunt of Kings Heath: No, I do not think that that follows. My point is that the inevitable impact of parliamentary scrutiny, given public concern about the National Health Service, is a tendency of Members of both Houses to ask the Government to take further action in relation to the health service, whatever its structure at any one time.

Baroness Carnegy of Lour: The Minister mentioned the Manpower Services Commission. I was a commissioner of that body when I came to this House. The government of the day was scrutinised the whole time concerning what the Manpower Services Commission was doing. I was not always very happy about what the Minister said because I thought that he sometimes knew what the commission was doing and sometimes he did not. But the Government's actions could be scrutinised totally. I would suggest that there is nothing here to prevent that.

Lord Hunt of Kings Heath: The reference to the Manpower Services Commission was in relation to the report by the Royal Commission in 1979. The Royal Commission looked at the model of the Manpower Services Commission and asked whether that would be a suitable one for the National Health Service. It felt that because of the large sums of public money voted by Parliament for the NHS, intense parliamentary scrutiny would be inevitable. Therefore, it felt that that kind of model was not appropriate for the National Health Service.
	I do not believe that a national agency, as proposed by the noble Baroness, Lady Cumberlege, is an appropriate way forward. The challenge for me and for the Bill is to identify a structure to enable parliamentary accountability to be discharged, which sets national standards, allows for effective performance management of the NHS—as it must be because the NHS spends money voted by Parliament—while allowing considerable freedom of action at a local level. My contention is that that is what the Government have done.
	The emphasis in our first term in office was to set up a national framework in which standards were set through the National Institute for Clinical Excellence, through national service frameworks, and inspected by the Commission for Health Improvement. Therefore, there is a strong set of national standards with an independent inspectorate. The NHS Modernisation Agency can help improve performance at local levels. Within that context, by setting that national framework, one can then allow much more freedom at a local level. That is what the Bill proposes by the establishment of strategic health authorities and principally by ensuring that primary care trusts, which are close to the frontline, have the bulk of NHS resources.
	I say to the noble Earl, Lord Howe—and we shall debate primary care trusts in due course—that my view is that, given that primary care is the crucial influence on activity in the National Health Service, devolving the budget to the primary care level makes a great deal of sense. It matches clinical responsibility with financial responsibility. I am convinced that, given the structure at national level, the commissioning of services at primary care level, we have the foundations to produce the right balance between the centre and locality.
	My right honourable friend the Secretary of State has made it clear that we are keen to look at current responsibilities and freedoms of NHS trusts. In the future, he wants those trusts that are performing well to have much less intervention from the centre. We are currently developing plans for foundation hospitals, independent not-for-profit institutions with just an annual cash for performance contract and no further form of performance management from the centre, and mutuals or public interest companies within rather than outside the public services and, particularly, the NHS.
	The foundation that is set in the Bill will allow that structure to flow. It will, rightly, keep accountability to Parliament for the running of the NHS but will allow much greater devolvement to the local level. That is a better response than a national corporation which—however much I sympathise with the reasons put forward by the noble Baroness—risks more centralisation and tensions between such an agency and Ministers. In the end it would not serve the purpose desired by the noble Baroness.

Baroness Pitkeathley: I offer an apology to the Chamber. It has been pointed out to me that I should have my registered an interest. I work as a very part-time consultant to a company providing nursing and residential care. I should have declared that. I meant no discourtesy to the Committee. I apologise if any was shown.

Baroness Cumberlege: I thank all Members of the Committee who have taken part in the debate. It has been an interesting debate, especially in its historical context. I particularly thank those who attached their names to the amendments.
	One of the points made by the noble Lord, Lord Desai—who unfortunately has had to leave—is particularly worth mentioning. It really is fairly disgraceful that the cases of individual are dragged across the Floor of the House, discussed in great detail and then blown up in the national press. No one felt proud of the Rose Alice case. Of course there are others.
	That is one of the penalties that we pay when we have politicians so much involved in running the NHS. The noble Baroness, Lady MacFarlane, was absolutely right that it was not a case of whether Parliament was involved, but the nature and the extent to which it is involved and how it should be involved. There should be a greater distance between the Government and the NHS.
	I am not trying to negate any accountability, but perhaps I may address the point made by the noble Baroness, Lady Pitkeathley. She said that she felt that one could not take politics out of health. No country's parliament does not get involved in health care but it is a question of degree and how it is done. The noble Lord, Lord Clement-Jones, explained how confusion between the political and the executive has increased over the years. He made a plea for clear and common boundaries. I agree. There are many models that we can explore. The King's Fund, on which I have built much of my work, is the first to say that it must go further and that there is much more work to be done.
	My noble friend Lady Carnegy of Lour drew extremely interesting parallels with the way that the further and higher education funding councils and their predecessor, the university grants committee, evolved over the years. We now see universities set free. My noble friend used the word "miraculous". I want to achieve the same for the National Health Service—a miraculous change in its effectiveness, morale and the way it is run.
	I thank my noble friend Lord Howe for his thoughtful exposition of the history of the NHS and the lessons to be learnt. He was so right to draw attention to morale and the waste of resources. He was absolutely on stream but we need a strong political and intellectual debate—not just in both Houses but outside.
	The Minister said that micro management is neither sensible nor feasible. We agree. But past legislation has intensified it. That is the impression within the NHS. Ministerial teams have consistently bypassed chairs and boards to take direct action in sacking chief executives. If that is not micro management, I do not know what is.
	I was grateful to the Minister for referring to past reports. The reports from Guillebaud, the Royal Commission, the Manpower Services Commission and Sir Roy Griffiths were all important but from another age. The Guillebaud report was produced at a time when we still had the vestiges of post-war rationing. That was a very different world. We have to move on.
	I worked closely with Sir Roy. I was the only person who sat through all the years of the NHS policy board that Sir Roy established. That board was supposed to serve as an umbrella, to protect the NHS from politicians. It was meant to be an intervening mechanism. At that time Sir Roy felt that there could not be a separate corporation or agency of the kind that I am promoting, but he was a realist. He understood not only the health service but industry, commerce and the wider world. He knew that one could not do everything at once but had to take a step-by-step approach.
	The time has come for my proposal to take off. It is an idea of its time. We have many robust intellects within this nation in the King's Fund and far beyond. I do not believe that we lack the wit to devise something that will improve the NHS enormously, help the people who work within it and give patients a much better deal.

Lord Hunt of Kings Heath: The kind of national corporation that the noble Baroness espouses might turn out as centralist as any other feature of the health service's structure through the years. Does she not think that the foundation trusts proposed by my right honourable friend the Secretary of State, which are about creating new types of local organisation, would be given considerably more freedom than current organisations provided they met performance criteria? Does not the noble Baroness accept that that could be a highly successful way of achieving sensible management of the NHS at local level?

Baroness Cumberlege: However the agency or corporation worked would depend entirely on its rules of engagement. The amendment gives power to the Secretary of State to draw up an agreed constitution. Foundation trusts could be set free but for how long? When will there be intervention? When will the Secretary of State decide that a trust's performance is not up to scratch? What will be the criteria? Many of us are concerned that decisions will be made but not according to clear and concise criteria, so that one will not know exactly when the Secretary of State will intervene.
	I thank noble Lords for an interesting debate. I shall read Hansard carefully but at this time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 2 to 6 not moved.]

Baroness Finlay of Llandaff: moved Amendment No. 7:
	Before Clause 1, insert the following new clause—
	"NATIONAL HEALTH SERVICE AGENCY FOR WALES
	(1) There shall be a body corporate to be known as the National Health Service Agency for Wales (referred to in this Act as "the Welsh Agency") for the purpose of carrying out the functions transferred or assigned to it by or under this Act.
	(2) The functions of the Welsh Agency are performed on behalf of the Crown."

Baroness Finlay of Llandaff: I shall speak also to Amendments Nos. 8 to 12. I declare an interest as an NHS clinician in Wales.
	We had an interesting and informed debate on the proposals for England. As the Bill applies to England and Wales, Amendments Nos. 7 to 12 reflect Amendment No. 1.
	The border between England and Wales can be considered to be a semi-permeable membrane, with a flow of patients in both directions. So arrangements must allow a reciprocity of provision. The philosophy behind the amendments is summed up in a statement by Tim Rogerson of the University of Wales College of Medicine, who is president of medicine, nursing, physiotherapy, dentistry, occupational therapy, radiography and operating department professionals. He said:
	"I do not want to spend the next 40 years of my career within an NHS that is used as a political football. We need a level of independence comparable to that of the Bank of England. That would allow leadership by the people who actually know where it should go. Without this independence, then our deep-seated loyalty to the NHS will be drastically weakened".
	Such a sentiment was separately and independently expressed and endorsed at the conference of Welsh LMCs last night. The various short-term, simplistic, political headline targets that we have all seen set for the NHS have failed. Delivery of health care is complex, rapidly changing and subject to global as well as local influences.
	There is much that is good in Wales. As the noble Lord, Lord Clement-Jones, suggested, there is much benefit from local consultation, and that occurs. Twenty two local health boards are proposed and, fortunately, they will be coterminous with local authorities—which will provide an excellent opportunity for preventive medicine and long-term care support.
	Amendment No. 7 names the body that should oversee health service reorganisation in Wales, functioning on behalf of the Crown to depoliticise day-to-day running of the NHS. Amendment No. 8 outlines the board for the Welsh agency and Amendment No. 9 outlines the functions—principally in relation to local health boards. The local health groups have been in existence for two years and are functioning well in what they do but are still learning their role and evolving. They cannot take on the huge number of functions about to be devolved to them and have themselves declared that they are under enormous time pressure to take on those functions.
	General practitioners have wanted a primary care directorate in Wales, but agreement to it is now in doubt. The directorates proposed through the Assembly are directorates for renewal, policy, finance, quality, human resources and facilities. The fear is that without a single agency that will result in fragmentation and duplication of work and duplication of decision-making processes. In fact, there will be loss of expertise and of the collective memory. It is the collective memory that safeguards patients. The reorganisation is also resulting in the loss of senior, experienced personnel.
	Last night, a motion was passed unanimously at the conference of Welsh LMCs stating the need for a,
	"significant body to handle contractor services in Wales to protect both professional interests and those of patients".
	An example is the Exeter computer system, which administers patient registration, cervical cytology recall, breast test Wales recall and other items of patient monitoring. The GPC Wales and directors of contractor services are concerned that fragmentation constitutes considerable risk to patient care and loss of continuity in registration of patients and patient records. That is just one system at risk under fragmentation of the system. Several hundred statutory functions currently undertaken by health authorities in Wales will be devolved or taken in centrally—although that remains undecided.
	I turn briefly to secondary and tertiary care. The Bill contains enabling clauses. The Minister for Health and Social Services, Jane Hutt, proposed that the National Assembly for Wales confirm key proposals that included strengthening the Specialised Health Services Commission for Wales as the basis for an all-Wales, arm's length commissioning body, commissioning tertiary services and with enhanced capacity to advise, guide and facilitate the commissioning of secondary care. For such a commission to work with local health boards, there is a need for Wales-wide co-ordination, rather than 22 local health boards individually negotiating for secondary care, and to strengthen the Specialised Health Services Commission for Wales for commissioning tertiary and specialist services. Specialist services are provided in secondary care organisations.
	The remit for the proposed all-Wales body, and indeed for an enhanced Specialised Health Services Commission for Wales, is still being worked out. It will be essential to ensure high standard, highly specialised services without unnecessary duplication, delivered as cost-effectively as possible. The organisation should then be brought under the Welsh health agency, which as I understand it is possible under the Bill's enabling provisions.
	Amendment No. 10 deals with transfer of functions and responsibilities, further to define the role of the Welsh agency. Amendment No. 11 ensures that finance is transferred, with open accounting for the way funding is spent, and that it remains within the strategic framework directed by the Assembly. Amendment No. 12 ensures that the agency reports on its functions and is fully accountable. It will be up to the health committee in the National Assembly for Wales to question how the agency administers its function and ensure that it has evaluated the system of delivery, with outcomes data collected systematically and consistently to expand the evidence base.
	Overall, such a Welsh agency would have clearer accountability and protect the service from "reorganisation fever" and resultant "reorganisation fatigue". Seven is a mystical number, deemed to be lucky. There are seven days in the week, seven ages of man and seven deadly sins. The intention behind the amendment is to protect the service from management reorganisation for at least seven years and allow evolution of delivery systems. Meaningful comparisons of outcomes can then be evaluated between the regions of England and Wales. I beg to move.

Lord Thomas of Gresford: I feel rather like Professor Tom Rogerson, who, from what the noble Baroness said, appears to be the professor of almost every speciality. This is the third Bill on which I have spoken this week. We have dealt with education and the police and are now dealing with health from a Welsh perspective. In each case, the English provisions seemed to be trying to give the Secretary of State more and more power and remove a degree of accountability.
	In education and health, we in Wales have a far more transparent and accountable body in which decisions can be discussed; in which there is a subject committee on health, for example, that discusses health issues and questions the Minister; where matters can be considered in full plenary session; and so on. My suggestion that the Home Office might like to devolve some powers to Wales was greeted as if it were the end of civilisation by a Minister. That bastion is yet to fall.
	In Wales, I am happy to say that in the Bill we have achieved a structure different from that in England and far more satisfactory. I regret that I must oppose the amendment. It was in fact our policy and written into the partnership agreement with Labour in Wales that there should be no further organisational change to the National Health Service, so that we could concentrate on delivering services. To use the expression of the noble Baroness, we were fed up with moving the deck chairs and thought that we ought to do something about the engine and get the ship moving in the right direction.
	As the Labour government in Wales in partnership with us wanted to abolish health authorities, we considered those proposals with two principles in mind. The first was a desire to strengthen local decision-making and the second to strengthen an all-Wales strategic approach to commissioning health services, especially secondary and tertiary care. After discussion with the Minister in Wales, the Specialised Health Services Commission for Wales seemed to be a body that could deal with the problems of commissioning specialised health services on an all-Wales basis. We thought that it should have a rather wider remit, providing technical advice and support to the local health boards on commissioning of services, and further independent and impartial advice.
	The Specialised Health Services Commission for Wales having been set up and running, it seems unnecessary to put in place between it and the National Assembly, with its open accountability to which I have already referred, a further body—such as that proposed in the amendments—mirroring the English system where the constitutional structure is now so different. Consequently, our view is that the structures in Wales, whereby decisions have been devolved and power placed in the hands of GPs, community nurses and health workers through the local boards, mean that the Specialised Health Services Commission for Wales can deal with the overall, strategic role for which the LMC resolution passed last night seemed to be calling. On these Benches, given the proliferation of acronyms, we have discussed what an LMC is, but I am sure that we shall be told in due course.
	While appreciating the spirit in which the noble Baroness moves the amendment—namely, to check the accumulation of powers in the hands of the Secretary of State in England—we consider it inappropriate in Wales and we on these Benches cannot support the amendment.

Baroness Finlay of Llandaff: I apologise for having used an acronym without first defining it. LMC stands for local medical committee. It is the committee made up of general practitioners across Wales.

Lord Roberts of Conwy: First, I congratulate the noble Baroness, Lady Finlay of Llandaff, on bringing forward these proposed clauses. They are similar to those put down by my noble friend Lady Cumberlege. However, there are significant differences. The thrust of the debate has been slightly different. The noble Baroness, Lady Finlay, talked of the need for Wales-wide co-ordination. We have to consider the deliberations of the LMC. There is a need to address the needs of the national dimension of the NHS in Wales. That is why I have some sympathy with the thrust of the new clauses.
	There is nothing in the Bill about the Welsh national dimension. The National Assembly and the relevant Minister are symbolic of it but we know little of the detailed arrangements. We know something of the machinery set up to implement the Bill and change the present structure of the NHS in Wales. There is the Minister's own implementation group and a subsidiary group within the NHS directorate. Then there are task forces charged with recommending the shaping of transition in specific areas. All were described well by the right honourable Member for Llanelli, Mr Denzil Davies, at Second Reading in another place.
	At col. 251 of the Official Report of 20th November in another place, he said:
	"I have a splendid paper which sets out the structure and the steps necessary for implementation . . . The paper describes the implementation plan, and 12 bodies will be created to carry it out. We start with something called a 'national steering group' which 'oversees the process of implementation'. That is fair enough, but we then have an implementation group that 'oversees the management of the implementation'. I am not sure what the difference between management and 'the process of implementation' entails".
	He then talks about his lack of understanding of the jargon and says:
	"In addition to the implementation group, there will be nine task and finish groups. Apparently, they will 'scope' the implementation".
	Mr Davies complains that he has not heard of the verb "to scope" before. It is all very amusing. His last comment bears repeating. He says:
	"So we start with a process that is followed by the management and then the scoping of the implementation. At the end of the day, when the 12 groups have sat down and done their work, we have 52 bodies plus the Committees of the National Assembly and its bureaucracy to control and administer the health service for a small nation of 3 million people".
	Assuming that the structural changes go according to plan, what will be the final controlling body at the top which will perform the functions described in the new clauses and possibly others that the Assembly may find necessary? We have not been enlightened on that point. There is nothing much about it in the Bill. Will those nine task groups, the implementation group and the scoping groups stay on and run the NHS in Wales from day to day? All we know is what we heard from the Minister for Health in Wales, Jane Hutt. She said that there was a complex web—I was struck by her description—of bodies at the top of the NHS in Wales. That was her vision of the future.
	It has always been recognised that there are certain aspects of the NHS that are best planned and provided nationally. At the time of the reorganisation in the early 1970s a central body, the common services agency, was set up to provide hospital buildings and technical services. The case for such a national organisation as the most economic and effective provider of certain services remains strong. Many other activities demand uniformity and standardisation which only a national body can supply. There is the purchasing of drugs. The noble Baroness, Lady Finlay, referred to IT. Health and well-being strategies referred to in the Bill will be evolved by local partnerships between the 22 local health boards, local authorities and trusts. Someone has to give direction to those bodies so that there is some identity between the different strategies in different areas.
	Devolution of power and responsibility is all very well but it is generally accepted that it has to be supervised, guided and regulated; otherwise there will be an excessive, confusing patchwork. There will be alarming gaps in provision and other defects.
	The only further piece of enlightenment that we have had is from the Parliamentary Under-Secretary at the Wales Office, Mr Touhig, in the fourth sitting of Standing Committee A on this Bill on 29th November. He made great play of the fact that,
	"the Assembly views the strengthened directorate as part of the new relationship that will be developed with the NHS. It will ensure that a concerted effort is made at national and local level to deliver local services that provide national standards of care".—[Official Report, Standing Committee A, Commons, 29/11/01; col. 85.]
	So there is recognition at least that there is a national dimension to the NHS in Wales as well as the local, devolved level. But we have nothing about that national dimension within this Bill.
	The biggest hurdle facing the new clauses is that they involve creating another quango, albeit an assembly quango. Some of us will know that the Assembly has a heritage of antipathy against quangos even though the Labour Party has created quite a few in its time—and very good quangos they have been. The Welsh Development Agency and the Development Board for Rural Wales have been greatly valued. The local health boards will be quangos of a kind. However, some form of national agency—perhaps not so much a corporate body, as suggested in the amendments, but on the lines of the agencies with which we are more familiar in Wales—would be preferable to control by politically driven committees. As Members will know, there have already been complaints that Assembly Ministers bypass their official bodies—quangos such as the Arts Council—and exercise personal power and patronage. Furthermore, as Assembly Ministers, they have the right to do so, I understand.
	I suspect that the Minister will say that we are all being impatient when we want to see the national dimension of the NHS represented by the Assembly and the Minister and that we should await the draft NHS Bill for Wales, promised in the Queen's Speech, to see the final shape of the NHS. Surely, however, the Minister can give us some idea of the thinking of the Assembly government on such issues and say a little more about that complex web, as Jane Hutt described the arrangements at national level.

Baroness Farrington of Ribbleton: I feel that I have made this point on many occasions when speaking for the Government on policy in Wales. The noble Lord, Lord Roberts of Conwy, asked whose role it was to supervise the Assembly. The position, under the devolution settlement, is that supervising, guiding, monitoring, criticising, complaining and holding to account the Members of the Assembly is the task of those who are fortunate enough to live in the Principality. The Assembly serves them.
	I accept the freedom and pleasure that people take from living and working on either side of Offa's Dyke. Those who live on one side do not, at the moment, have the benefit of regional devolution; those who live on the more democratically accountable side of Offa's Dyke do. In that sense, I accept that, for the purposes of social life, work and healthcare, it may be a semi-permeable membrane, as the noble Baroness, Lady Finlay of Llandaff, said. Politically, however, one side is far stronger than the other.
	The new clauses would place responsibility for the management of the NHS in Wales in the hands of a new agency set up for that purpose. As noble Lords have recognised, the proposal is similar to those contained in Amendments Nos. 1 to 6. My noble friend Lord Hunt of Kings Heath has just provided admirable evidence and argument as to why an agency for England should not be established. Many of the arguments are similar for Wales, and Members of the Committee will be grateful to hear that I do not intend to repeat them all. I shall concentrate instead on the additional defects in the principle of the arrangement proposed in the amendment moved by the noble Baroness, Lady Finlay of Llandaff, and the other amendments to which she spoke.
	The Wales-only clauses in the Bill involve a new assertion of the National Assembly's direct democratic control of its health responsibilities. That point was made by the noble Lord, Lord Thomas of Gresford. The establishment of local health boards in Wales will enable the Assembly to take a major step forward to renewing the NHS in Wales. It will develop the local health group model and will pave the way to achieving the aims of the NHS Plan in Wales, Improving Health in Wales, published by the Assembly on 2nd February, 2001. The proposals for structural change have been the subject of full and open consultation in Wales. The strengthening of local health groups, allied with a new sense of leadership, direction and oversight of the NHS on the part of the National Assembly for Wales, will deliver a key part of the NHS Plan in Wales, namely, an organisation that is strengthened locally and nationally. That will follow the abolition of health authorities in Wales by 31st March, 2003.
	Creating an additional health service agency for Wales would pose a serious risk of over-centralisation and would impose a centralised model of control over the whole system. That begins to answer some of the points made by the noble Baroness, Lady Finlay of Llandaff. It is the opposite of what we are trying to create in Wales. The national and local accountabilities and functions are clear. The Assembly will provide strategic direction and leadership on health policies, standards, resourcing and so on. Local health boards, in partnership with local authorities and other key stakeholders, will secure and deliver healthcare in their localities.
	To the noble Baroness, Lady Finlay of Llandaff, I say that the Specialised Health Services Commission for Wales will provide specialist advice and guidance, and the Assembly regional offices will maintain a visible local presence and act as a source of information and advice. The noble Lord, Lord Roberts of Conwy, in describing the complex web, was describing a range of groups that were asked to help implement the NHS Plan in Wales. They are completing their tasks and are being wound up. The implementation of the structural reform is now a management-led exercise, run in partnership by the Assembly, the NHS and the authorities. I hope that that clarifies what the Minister, Jane Hutt, meant when she spoke to Peers from all parties.
	The role of the Specialised Health Services Commission for Wales is to be strengthened to provide an all-Wales, arms-length commissioning body to deal with tertiary and other highly specialised acute services. The commission's activities will be based on the needs expressed by local health boards and will work for local health boards and the Assembly. Technical advice and guidance for NHS Wales will also be available from the commission. As in England, the real power and resources in the NHS in Wales will move to the front line. From next April, local health boards, involving professionals and patients, will be up and running in all parts of Wales.
	The Bill demonstrates the Government's commitment to the principle of devolution. The National Assembly for Wales continues to develop policies that are distinctive to Wales, reflecting different local and national conditions and perspectives. I recommend that the House do not accept the amendment moved by the noble Baroness, Lady Finlay of Llandaff. Were she to feel that she could withdraw the amendment, I should hope that, if she had any further detailed questions, she would not hesitate to seek clarification between Committee stage and Report.

Baroness Finlay of Llandaff: I thank all those who contributed to this debate and addressed the issues I raised. Perhaps I might briefly respond to some of the comments.
	The noble Lord, Lord Thomas of Gresford, pointed out that we have open debate in Wales and have benefited greatly from the National Assembly for Wales. The partnership arrangement opposed further reorganisation and that brought a sigh of relief from within the profession. The Specialised Health Service Commission for Wales should certainly have a greater remit, which is needed to ensure tertiary highly specialised services and secondary care. However, it does not ensure consistency of standards across primary healthcare and the delivery of the statutory functions around Wales with a degree of equity.
	The reassurance of a single primary care directorate may solve the anxieties of the local medical committees. The noble Lord, Lord Roberts of Conwy, appreciated the thrust of the debate in Wales; that it is different and that there is a need to ensure national consistency and equity of primary care delivery across Wales.
	There is a deep-seated concern that the changes are too far and too fast, and with that uncertainty goes demoralisation. Purchasing drugs and IT systems should be standardised. In a nation of 3 million people we surely could have a single computerised system to ensure laboratory results are available as they emerge from the autoanalyser and as a patient moves between different sectors of the service. We have an information system for clinical oncology developed and run by my trust which is an example of good practice. Unfortunately, it deals only with cancer patients.
	I am not proposing a further quango for the sake of it. The corporate body may not be the best solution. But I hope that the debate will inform the NHS Bill for Wales. The noble Baroness, Lady Farrington, kindly replied in detail to the points I raised. The Assembly will be held to account by the people of Wales. The Assembly acts on behalf of the people of Wales. That is why there needs to be clear blue water between the people and the service's daily organisation.
	The intentions behind the NHS Plan are to be welcomed and can be achieved by evolution, not revolution. We have severe shortages in primary care among professionals in Wales, and there is concern that primary care professionals cannot take on too much too quickly. I am grateful for the debate and therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 8 to 12 not moved.]

Lord Clement-Jones: moved Amendment No. 13:
	Before Clause 1, insert the following new clause—
	"DUTY TO PREVENT AGE DISCRIMINATION
	(1) It shall be the duty of any person or body exercising functions or otherwise providing services within the National Health Service to prevent discrimination by reason of age against any class of persons receiving services from the National Health Service except where clinically justified.
	(2) It shall be the duty of any prescribed NHS body to publish an annual statement of the measures they have taken to prevent discrimination on the grounds of age against any class of persons receiving services from the National Health Service."

Lord Clement-Jones: Aficionados of health Bills—that word is not out of place; we have had a health Bill every year since this Government came to office—will recognise that Amendment No. 13 is similar to amendments tabled to each of the previous health Bills. I make no apology for that. One in five of us is aged 55 or over and 42 per cent of NHS resources is devoted to older people. If we do not get our health service right in relation to older people, we are failing horribly not only in human terms but also in the waste of resources.
	In the recent past the Secretary of States was quoted as saying,
	"I will not tolerate anything which smacks of age discrimination in the NHS".
	But the fact is that this Government, to date, have not done nearly enough to prevent it. Before they came into power in 1997 they promised an investigation into age discrimination in the NHS. The grounds for such an investigation were obvious. It was clear that there had been restrictions on heart bypass operations, heart transplants and cardiac rehabilitation for older people. Kidney dialysis and transplants had been refused to patients over the age of 70 and there are no public health fitness targets for those over the age of 65 in Our Healthier Nation.
	That is just a snapshot of some of the problems that could have been investigated at the time. But that inquiry never took place. A succession of reports from voluntary organisations and official bodies since 1997 have shown the presence of age discrimination in the health service. The national confidential inquiry into perioptic deaths in 1999 referred to staff shortages and lack of experience leading directly to the deaths of older people.
	An Age Concern survey of 1,000 patients at the end of 1999 found that health was a key concern of older people. But its survey of GPs at the same time found that 77 per cent said that rationing on the basis of age was taking place in the NHS. Another report by Age Concern, Speaking Out, which was published in November 2000, showed that ill-treatment and discrimination against the elderly was still rife at that time.
	A report published in 2000 by the Association of Community Health Councils on accident and emergency departments demonstrated horrendous discrimination against older people. Elderly patients are rushed to hospital but are then left to wait on average far longer than younger patients to die on trolleys.
	The King's Fund report, Old Habits Die Hard: Tackling Age Discrimination in Health and Social Care, was published earlier this year. So it is not just reports of 1999 and 2000 which illustrate age discrimination; the King's Fund report was published earlier this year. It illustrates the belief of senior managers that age discrimination is endemic in the health service. Three out of four senior health and social care managers believe that age discrimination exists in their local services. Help the Aged's recent report, Age Discrimination in Public Policy, is a review of evidence of discrimination and was published this month.
	The National Service Framework for Older People by itself is not enough. It is welcome and of course the Government are relying on it as an alternative to legislation. But we need to create a positive legal duty and a positive culture of care. It is not only a matter of resources; above all, it is a matter of respect. That should be enshrined in legislation.
	As I have said, we on these Benches have argued on previous occasions, both in respect of the Health and Social Care Act and the Care Standards Act, that such a duty should be on the face of legislation. This Bill presents another opportunity for the Government to accept the need for a clear duty not to discriminate. It is clear that the voluntary approach is not working. Older people are still receiving second rate care. We need to ensure, as a matter of legislation, that training takes place and staff in the NHS recognise the need to comply. I beg to move.

Lord Turnberg: I am sorry that I am unable to support the amendment of the noble Lord, Lord Clement-Jones. I say I am sorry because, in my advancing years, I am second to none in my wish to see age discrimination banished from all walks of life, not least in the health service. So I am right behind, indeed somewhat ahead, of the noble Lord in the principle behind the amendment.
	My problem is in working out whether this principle should be on the face of the Bill. I fear that it should not, otherwise we would have to include discrimination on all sorts of grounds—colour, creed, race, religion, all of which are vitally important. Discrimination on any of those grounds is equally abhorrent.
	We would have to be clear, therefore, that discrimination of any type is not approved. So, much as I should like to see this provision on the face of the Bill, I regret that I cannot support it.

Baroness Pitkeathley: I too must speak against this amendment, not because I am in any way opposed to age discrimination but for the reasons put forward by my noble friend.
	Discrimination of any kind is utterly unacceptable in the NHS. However, amendments to a Bill is probably not the way to ensure that we tackle age or any other kind of discrimination. A framework already exists for tackling this problem in the National Service Framework for Older People. There is already evidence that that is working well for the benefit of older people.
	In my prolonged stay in hospital last year, I saw no evidence at all of any kind of discrimination against older people because each patient—at least in my ward in the Middlesex hospital—was treated with dignity, respect and courtesy as well as with clinical expertise, based not on the patient's age but on their clinical needs. How that operates in the ward is not by legislation, but by the training, experience and attitude of all staff. Attitudes are set and changed by committed leadership and example and by staff working in a climate which is so respectful of individual patients that discrimination on any ground is simply unacceptable.

Earl Howe: I have a great deal of sympathy with this amendment. The Government's national service framework for older people, published a year ago, was filled to the brim with sound principles and good, sensible practice. It was widely and deservedly welcomed among managers in the health arena, and indeed in social care. Nevertheless, when one speaks to many people in the health service there is a perception that the legacy of ageist attitudes from the past continues to cling on, if only in odd corners.
	I admit that evidence of ageism is elusive and anecdotal. But the feeling emerged very strongly from the recent King's Fund study that unless there are the proper resources and support available for managers trying to implement the national service framework, it would be very difficult to promote and foster what is quite a complex policy on as wide and as thorough a basis as is necessary. Rates of progress in implementing the national service framework vary considerably around the country. The King's Fund argued that motivation to tackle age discrimination would be a great deal strengthened by the creation of a legal requirement to promote age equality. One has at least to stop and listen to that view coming from that source.
	Against that backdrop it has to be said that there is even the odd Cassandra taking part in this wider debate. Recently, Malcolm Johnson, who is director of the International Institute on Health and Ageing at Bristol University, expressed the view that the Government's pledge to stamp out ageism in the NHS is doomed to failure because of a lack of staff and resources. For example, he has spoken about the low priority generally given to chronic illnesses and the lack of checks and screenings for older people as evidence that ageism in health care is endemic. He was also quoted as saying that the training of most practitioners contains very little about older people and that in the minds of healthcare professionals there is an inbuilt hierarchy of priorities which is hard to shift. Those are the things which he said stand in the way of rooting out ageism.
	I do not believe that I would classify myself as quite such a pessimist because I believe that clinicians and managers are much more alive to the issues of discrimination than they perhaps were a few years ago. But I believe that there is still work to do. We need to involve older people themselves in looking at the various policies which have a disproportionate effect on older people and hear what they think about them. We need to examine those specialist services which are aimed mainly at older people and make sure that there are no unacceptable disparities around the country in terms of access to treatment and support. Incidentally, I wonder how the new NHS structures will facilitate that process of comparison.
	I turn to a particular hobbyhorse of mine. We need to look at hospices and specialist palliative care services, where the degree of public funding has been allowed to slip in recent years to levels that make it very difficult for many hospices to continue functioning. I hope that the Minister will be able to give his own insight into these very important issues.

Baroness Thomas of Walliswood: Perhaps I may make a small additional point. The noble Baroness, Lady Pitkeathley, and other speakers, have referred to the need for equal treatment in the sense of equal respect given to patients of different ages. But that is not necessarily what we are talking about here. On a number of occasions we have discussed in this House the problem of ensuring that older people get the right food when in hospital. It is to that kind of thing as well as to those matters raised by the noble Earl, Lord Howe, that those responsible should direct their attention when spending 75 per cent of the funds directed at NHS secondary care. Their influence could be very strong in ensuring that hospital trusts in particular pay attention to the special needs of older people and not so much to the need for respect.

Baroness Finlay of Llandaff: I wish to speak very briefly to this amendment because it highlights an extremely important issue, which is that discrimination against any group cannot be condoned in any way. Sadly, with limited resources, there is always some form of rationing. But it really must not be at the expense of any single group.
	Perhaps I may take up the point made by the noble Earl, Lord Howe. The hospice service is now providing a core service to patients, which relieves the NHS of some statutory functions, yet it does not even receive 50 per cent funding for the core service delivery of specialist palliative care. It is not frills in the service, but core care for people in need. It is worth remembering that money spent on small items—such as ensuring that patients have the dentures they need, as these are rapidly realigned if they do not fit; that they have the mobility aids that they require installed in their own homes to allow them to get home—could result in cost savings at the end of the day rather than increased expenditure.
	Therefore, I suggest that the spirit of the amendment is excellent but, sadly, it addresses age only. There are many other groups within our population who have disabilities of different kinds and who also experience a degree of discrimination or who believe that they are discriminated against. Possibly, the proposed patients' fora and the community health councils, which I am delighted to say we are retaining in Wales, should be charged with ensuring specifically that this type of discrimination does not occur.

Baroness Carnegy of Lour: When the Minister replies can he answer one question for me? In a number of GP practices I know, when one telephones for an appointment one is asked for one's date of birth. Is that usual and what is the reason for it?

Lord Hunt of Kings Heath: From nodding heads around the Chamber, apparently it is quite usual for some practices to ask for that information. I do not know the reason for it. It may be sought as part of the identification. Quite often one is asked for a date of birth, along with the postcode, for identification purposes. I cannot supply any more information on that.
	This is a very important debate. Noble Lords have debated the issue of discrimination against older people in the health service on a number of occasions. However, I say to the noble Lord, Lord Clement-Jones, who a few minutes ago was an arch de-centraliser, now in a very centralist directional mode—

Lord Clement-Jones: But the noble Lord realises that on devolution of any kind national standards are of great importance.

Lord Hunt of Kings Heath: I am glad for that support of government policy. This is a very important matter. I believe that the government's approach, which is essentially through the national service framework which many speakers have mentioned, is the right way forward. That framework sets out a number of standards for older people. The first states,
	"NHS services will be provided, regardless of age, on the basis of clinical need alone. Social care services will not use age in their eligibility criteria or policies to restrict access to available services".
	It seems to me that that sets the philosophy under which we expect services to be provided for older people, either in the National Health Service or in social care. It is one thing to say that but it is another to ensure that it happens in practice. The national service framework contains a positive action strategy to ensure that older people are never unfairly discriminated against in accessing National Health Service or social care services. We shall be monitoring compliance with that strategy. In our view, delivering on the national service framework for older people makes the duty to prevent age discrimination in healthcare unnecessary, although of course, I am sympathetic to the overall aim that the noble Lord, Lord Clement-Jones, is trying to achieve.
	We have recently completed an analysis of the audits of age-related policies required by the framework. That has shown that age-related policies are normally based on clinical evidence. In nearly all other cases reviews of the policies are being undertaken or action has already been taken.
	Noble Lords have referred to the excellent King's Fund report on age discrimination, and as was recognised in that report, there is little consensus or clarity on the meaning and consequences of age discrimination. I have no doubt that more work needs to be done as the NSF programme develops. Guidance was issued to inform the age-related audits of written policy in the National Health Service. Additional tools need to be developed to assist in the auditing of policies on implicit age discrimination and on the national benchmark of access to the services and treatment that are important for older people.
	Age discrimination is complex and cannot be addressed overnight. It may manifest itself in a number of different ways—I agree with the noble Lord, Lord Clement-Jones on this. Those ways might include low overall rates of provision of those interventions that are relatively more important for older people, such as hip and knee replacement, cataract surgery, occupational therapy, chiropody, community equipment, assistive technology, hearing aids and National Health Service dentistry, to acknowledge the comments made by the noble Baroness, Lady Finlay. Age discrimination may show itself in low relative rates of access of older people to specialist services compared with younger people or refusal of particular treatments, such as revascularisation or expensive drugs. There may be low referral rates to particular services or, indeed, unthinking or insensitive treatment from individual members of staff. We would all have to acknowledge that there are examples of that within the National Health Service. I should make it clear that the aim of the national service framework is not to favour older people over other age groups but to ensure that they are treated as individuals. Some progress has been made.
	The noble Baroness, Lady Thomas, talked about the issue of food in hospitals. I well recognise that that has been an issue both in terms of the nutritional value and whether older people actually eat enough. Past evidence has shown that they do not. There is also the matter of how meals are organised on the ward and whether nursing staff monitor that individual patients are either feeding themselves or are given assistance if necessary. We are making progress. The chief nursing officer has written to individual nurses to remind them of their duties in that respect. The work that we are doing on a national menu will improve the overall substance and nutrition of the food provided in the National Health Service.
	The work on phasing out mixed-sex wards again is an example of responding to issues raised by older people. We published new guidance on resuscitation policy and we have said that decisions not to resuscitate should be made on a case-by-case basis. A blanket do-not-resuscitate policy based on a specific patient group such as older patients is unacceptable. The health service recognises that surgery is becoming safer and new techniques and treatments mean that more people can receive treatment, including older people for whom surgery may not previously have been an option.
	When breast-screening programmes were first set up in 1988 evidence suggested that older women would not accept screening invitations, so they were not included in the routine recall programme. Government-funded pilot studies have now shown that extending routine invitations for breast screening to women aged 65 to 69 is both feasible and cost-effective. Noble Lords will know that we are extending the programme as a result.
	More generally, the noble Earl, Lord Howe, raised the question of how to involve older people in decisions about their treatment and, more generally, in ensuring that the National Health Service is fully aware of their needs. Patient forums are one way of ensuring that, close to where services are provided, there is input from older people and others to ensure that some of these issues are raised.
	On the matter of hospices and special palliative care, I acknowledge their vital role and the partnership required between the National Health Service and the independent care sector. Noble Lords will know that we have made various announcements in the past few months concerning the provision of extra resources and by encouraging the health authorities locally to develop palliative care policies in which independent care provision becomes fully part of the overall strategy and policy of that area.
	To answer the question asked by the noble Baroness, Lady Carnegy, it has been confirmed that date of birth is always requested for identification only and not for any other reason.
	In conclusion, I echo the points made by my noble friends, Lord Turnberg and Lady Pitkeathley that there is all-round support for the intention behind the amendment, but I do not believe that legislation is the right route. We are making progress; there is a lot to do, but the national service framework provides the best vehicle for doing so.

Lord Clement-Jones: I am grateful for the support—at least for the intention behind the amendment, as the Minister put it—and for the fullness of the Minister's reply.
	I confess to being slightly disappointed at the response of the noble Lord, Lord Turnberg, to the amendment. It is one of those tuppence coloured, penny plain issues. If I offer penny plain, which is the age discrimination issue, that is far too narrow; so it is not comprehensive enough in its anti-discrimination provisions. If I offer the tuppence coloured, which is a general duty of equity within the health service, that is far too blanket in its nature and could be shot down for being too vague and covering far too wide a group of patients. I do not think that one would win in that kind of argument, so I shall not base too much credence on the fact that a legal duty is an inappropriate way of proceeding.
	I ask those who are not in favour of a legal duty to say what they would do if I were to come back in a year's time, when I am sure we will have yet another Government health Bill, and say that the national service framework has not been working. Will the Minister say when he believes evidence of compliance will be made available under the NSF? He said that the health service would be monitoring compliance and it is therefore incumbent on Ministers to produce that evidence regularly and say when it will be available.
	I take as my model—a campaigning model to some degree—the noble Lord, Lord Morris of Manchester. He has no hesitation in bringing forward a proposition time and time again—in fact, every six months. I am being moderate in introducing mine only once a year. The noble Lord, Lord Morris proposes compensation for haemophilia patients who contract hepatitis C—and quite rightly. I am confident that noble Lords who are sceptical of imposing a legal duty will eventually realise that the national service framework is not enough. Let us see how the national service framework will work in practice and monitor compliance.
	The Minister himself does not appear to be too confident. He referred to "some progress", which is not a resounding accolade for progress on the national service framework.

Lord Hunt of Kings Heath: I am grateful to the noble Lord for allowing me to intervene. I was seeking to give a realistic assessment of where the NHS had got to. I said that there were considerable challenges—all noble Lords will agree with that—but that we had made good progress in some areas, and I gave a number of examples.
	The national service framework provides the right vehicle for ensuring that appropriate action is taken, but we should not under-estimate the challenges facing the health service. That is not being complacent; that is being realistic about the real challenges.
	The noble Lord, Lord Clement-Jones, asked about progress and programmes. By April of this year, the agreements that need to be reached between NHS trusts and health authorities will include initial action to address any age discrimination identified and any strategic policies needed to reflect the health improvement programmes agreed for the next financial year. By October of this year, in order to facilitate comparisons across health authorities and to establish best practice benchmarks based on health outcomes and needs, an analysis of the level and patterns of services for older people will be completed. That means that local health systems from 2003-04 onwards will be able to demonstrate year-on-year improvements in moving towards those benchmarks. So, in terms of measurement, we have the right structure to enable the establishment of benchmarks and the measurement of improvement.

Lord Clement-Jones: I am grateful to the Minister for that clarification. Ultimately, this matter boils down to patient experience. It will not be very edifying if I come back in a year's time and say that voluntary organisations such as Age Concern and Help the Aged have reported that patient experience is still poor, and the Minister retorts to me, "No, no. All our benchmarks are in place and are being developed". Will there be tracking of patient experience and will we find out whether matters are improving?

Lord Hunt of Kings Heath: I am glad that the noble Lord has raised the question. He will probably have forgotten our intention to have national surveys of patient opinion, which will be published over the next few months. They will include national questions which will enable the comparison of trust with trust, together with local questions which individual organisations can add to the survey. That is one way in which we can pick up on some of the issues. Patient forums—which will enable us not only to pick up on the results of surveys but to reflect on the evidence that patient advisory and liaison services have provided within individual trusts—will also be a way in which progress can be monitored and the attention of the boards of NHS trusts drawn to particular concerns in this area.
	I reject the noble Lord's charge that we do not have a vigorous process for ensuring that this happens.

Lord Clement-Jones: I am grateful to the Minister. That is much more satisfactory. As long as the surveys are directed specifically, among other matters, to the experience of older patients, of older people in acute hospitals, that will be entirely satisfactory. We would all welcome that. To have consistent data of that kind tracked through the years will help establish a much better basis for ensuring that we take account of patient experience.
	It has become clear in the course of the debate that the Committee does not believe that we are quite ready for legislation. However, it should be borne in mind—the noble Earl, Lord Howe, referred to this—that it is significant that the King's Fund, having carried out its survey of health service managers, came to the conclusion that the only way to eliminate age discrimination in the health service was through legislation. That statement was not made lightly in the course of its report.
	No doubt we shall return to this matter at a future date. At this stage my amendment was designed to test the Government's resolve on the question of age discrimination. It has done so successfully and elicited a fairly full statement on the Government's current policy on eliminating age discrimination in the health service. I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Filkin: My Lords, this may be an convenient moment to break for dinner. I suggest that we return to this business not before twenty-five minutes to nine. I therefore beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

National Assembly for Wales (Representation of the People) (Amendment) Order 2002

Baroness Farrington of Ribbleton: rose to move, That the draft order laid before the House on 14th February be approved [20th Report from the Joint Committee].

Baroness Farrington of Ribbleton: My Lords, the draft order amends the National Assembly for Wales (Representation of the People) Order 1999 to bring legislation governing elections to the Assembly in line with legislation for parliamentary and local government elections in Wales.
	These changes are required as a result of the provisions of the Representation of the People Act 2000, of the Political Parties, Elections and Referendums Act 2000 and of the Representation of the People (England and Wales) Regulations 2001.
	The main changes made by the draft order are in the following areas: to allow voters to vote by post without having to give a reason for their need to do so; to provide blind voters with a device which would assist them in voting without the assistance of a companion, if they so wish, and to allow persons with other disabilities to vote with the assistance of a companion; to ensure that the 1999 order is consistent with the new arrangements for rolling registration; to accommodate the new controls on the expenses of political parties set out in the Political Parties, Elections and Referendums Act 2000; to accommodate the changes made by the Political Parties, Elections and Referendums Act 2000 concerning the description of registered political parties and independent candidates on nomination forms and ballot papers; and to make other consequential amendments to achieve consistency with the amendments to the Representation of the People Act 1983 in relation to the conveyance of voters to polling booths and the use of school buildings as committee rooms.
	Wales Office officials have worked closely with their counterparts in the Assembly on this draft order and Assembly Ministers have been kept informed. Further, the changes made by the draft order have been the subject of consultation with the Electoral Commission, which supports the proposed changes.
	All these changes are important but it is likely that the changes relating to postal voting and to voters with disabilities are those which are of the widest interest. The changes will mean that postal votes are accessible to all who wish to use them. This is a positive step to encourage the electorate to take part in elections by giving them more options for voting. The changes will also mean that all voters with disabilities will now be entitled to the assistance of a companion. Previously, this assistance was available only to blind voters.
	I have already mentioned that the order provides that each polling station should be equipped with a device to allow blind voters, if they so wish, to cast their votes unaided. In addition, the order provides for a large format ballot paper to be displayed to assist visually impaired voters. All these provisions are in line with those which were in force at the last general election and were well received by disabled voters.
	While the draft order would make a number of important changes to the Assembly's electoral process, further changes are required. My right honourable friend the Secretary of State for Wales proposes, therefore, to bring forward a further draft order which will include new provisions relating to individual candidates' expenses, the broadcasting of local items during an election period, the publication of exit polls and false statements in nomination papers. Further consultation will be required on these topics before a further order can be drafted. The second draft order will, however, be laid before Parliament well in advance of the next Assembly elections, which will take place on 1st May 2003.
	The contents of this draft order are not contentious. They bring Assembly elections into line with parliamentary and local government elections in important areas such as accessibility to postal voting and assistance for voters with disabilities. All the changes are in the interests of increasing enfranchisement, encouraging the electorate to use their vote. I beg to move.
	Moved, That the draft order laid before the House on 14th February be approved [20th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

Lord Roberts of Conwy: My Lords, I am grateful to the noble Baroness for her detailed exposition of the draft order and her justification of the need for it following the passage of further legislation relating to parliamentary and local government elections as outlined in the Explanatory Notes. I understand that there will be a further draft order before the next Assembly election on 1st May 2003.
	The date of local government elections has been moved forward to 2004, so that it will not coincide with Assembly elections. Some believe that there are other, less noble reasons for the postponement, such as a wish to avoid facing the electors for as long as possible. Be that as it may, I believe that the reverse has happened in Scotland. The Scottish parliamentary and local government elections have been brought together, which, if we are interested in promoting voter participation, makes more sense. If the noble Baroness has a view on that, she may care to share it with us.
	As a Welsh speaker, I am happy to reassure the noble Baroness that the Welsh language references in this draft order are impeccable, both in content and printing. I have only one query, to which I shall come straight away, in the hope that the Minister and her officials may be able to deal with it before the end of the debate. It relates to the new Article 50 at the top of page 6 and the power to vary provisions concerning election expenses. The new article states:
	"After such consultation with the Assembly as appears to the Secretary of State to be appropriate, he may by order made by statutory instrument vary any of the sums to which this article applies".
	Subsection (3) states that such an order,
	"shall be subject to annulment in pursuance of a resolution of either House of Parliament".
	I take it that the Secretary of State will probably be the Secretary of State for Wales, though technically it could be any other member of the Government, and that the statutory instrument will be subject to the procedures of this Parliament, not those of the Assembly. If it were not so, the annulment procedure would be difficult to operate, since this Parliament does not, so far as I am aware, involve itself with statutory instruments originating in the Assembly. I should be grateful if the Minister would confirm my understanding of that procedure.
	There are a number of welcome improvements in this order, especially those relating to voters with disabilities and those unable to read for one reason or another. I am glad that blind people who cannot use the technology at hand can still be assisted by another person and that similar assistance will be extended to others who need it. It is important that the assisted voter should be under no duress and should be able freely to accept assistance. The officer in charge of the polling station should ensure that that happens. I know that the Secretary of State for Wales is aware of the point and is considering it with his colleagues.
	There are also new provisions for proxy voting by those engaged in education. I hope that all who benefit from these arrangements will be reminded that it is an offence to vote more than once, albeit in different constituencies. That point occurred to me and was also made by the Plaid Cymru Member for Ceredigion when this order was before the 10th Standing Committee on Delegated Legislation.
	There is some clarification on the issue of individual candidate expenditure, as opposed to party expenditure. If we are to achieve uniformity and equality of opportunity between rival candidates, further definition and firm application of the rules is required in this area. We could debate this point at great length. However, we bear in mind that a further order is to be moved relating to candidates' expenses and related matters.
	Anyone who wishes can now vote by post and can change to a vote by proxy. A proxy vote can also be changed to a postal vote. I suspect that those changes will be extensively used and we hope not abused. We are all concerned about low turnout and wish to improve opportunities to vote, but we must also respect the voter's right to abstain. Abstention of itself often carries a message.

Lord Thomas of Gresford: My Lords, I, too, thank the Minister for her explanation of this extremely complicated order and congratulate the draftsman on a masterly piece of drafting. So far, no one has been able to find a flaw in it.
	As a member of the Welsh Assembly Commission considering proportional representation for local government elections, I can assure the noble Lord, Lord Roberts of Conwy, that our inquiries of all 22 local authorities in Wales revealed that the members of those authorities asked that the local government elections should be separate from the Assembly elections. They requested that for a variety of reasons: first, because they wish to receive their personal mandate in the election; secondly, because so many of them, particularly in West Wales, are Independents and therefore feel that a greater distinction should be drawn between Assembly and local government elections.
	I am impressed by the fact that the noble Lord, Lord Roberts of Conwy, approves of the Welsh. I was a pupil of his brother, a very eminent Queen's Counsel who later became a judge, and I recall that when I trailed after him in the Welsh courts where the Welsh language was being used, he would from time to time correct the interpreter. The noble Lord's language skills are absolutely without par in the whole of Wales.
	With regard to the question of disability, we on these Benches welcome the extended provisions for people suffering from a variety of disabilities to be assisted in casting votes. Since those disabilities include the inability to read, perhaps we may see the end of the cross on the ballot paper and the introduction of one, two, three and four in proportional elections by single transferable vote in multi-member constituencies.

Baroness Farrington of Ribbleton: My Lords, I begin with the concluding point made by the noble Lord, Lord Thomas of Gresford. He may not be surprised to discover that I do not intend to be drawn into that debate today.
	I thank the noble Lords, Lord Roberts of Conwy and Lord Thomas of Gresford, for their compliments on the quality of the Welsh language used in the draft order. As someone whose grandfather at the age of three was beaten were he to speak in any language other than English at school, when his own mother tongue was Welsh, I take particular pride in it.
	Both noble Lords raised the issue of postponement. That is a matter for the National Assembly for Wales. Parliament gave the Assembly the necessary powers to change the years in which Welsh local elections are held. I note the views that have been expressed. However, I do not express a personal view. It is solely a matter for the Assembly.
	The noble Lord, Lord Roberts of Conwy, raised the issue of the definition of candidates' expenses. Following the enactment of the Political Parties, Elections and Referendums Act 2000, the financing and expenditure of political parties have been governed by that Act. The definition is necessary to distinguish such expenditure from that incurred by individual candidates, which is still controlled by the terms of the Assembly Elections Order. The reasoning behind the increased limits on election expenses is that the new figures bring the limits for Assembly elections into line with those for parliamentary elections.
	The noble Lord also referred to new Article 50 of the 1999 order, which deals with election expenses. I can confirm that the Secretary of State's power by order to vary sums to which the article applies shall be subject to annulment pursuant to a resolution of either House of Parliament. I can tell the noble Lord that the statutory instrument will be subject to the procedures of this Parliament, not those of the Assembly; otherwise, as the noble Lord observed, the annulment process would be difficult to operate.
	Both noble Lords mentioned absent voters and proxy votes. When the order comes into force, students will be able to request a postal vote without giving reasons. They will also be able to vote by proxy and, as the noble Lord, Lord Roberts, said, change the vote from postal to proxy and back. I note his view about abstention being the right of individuals. We all agree that people should not vote twice. Indeed, this process will be jealously and carefully monitored.
	I should also tell noble Lords that the case for disabled voters is recognised as being very important. There are already some safeguards to protect individual voters with disability from coercion in the free exercise of the franchise. It is an offence under Article 87 of the 1999 order. We shall, course, raise the issue with the Department for Transport, Local Government and the Regions in order to consider whether any additional safeguards would be desirable.
	I hope that I have answered all the points raised by both noble Lords. I commend the order to the House.

On Question, Motion agreed to.

Asylum Support (Repeal) Order 2002

Lord Bassam of Brighton: rose to move, That the draft order laid before the House on 25th February be approved [21st Report from the Joint Committee].

Lord Bassam of Brighton: My Lords, I move this Motion on behalf of my noble friend Lord Rooker. The order, which was laid before Parliament on 25th February, repeals Section 96(3) of the Immigration and Asylum Act 1999. That section states that asylum support provided by the Secretary of State under subsection (1)(a) or (b), or subsection (2), of Section 96 must not be wholly or mainly made by way of payments to a supported person or to his dependants, except in exceptional cases. The provision effectively bars the Home Secretary from making subsistence payments to asylum seekers in cash, except to a limited extent.
	As noble Lords will know, the Home Secretary announced in another place last October the Government's intention to move away from the provision of subsistence payments by way of vouchers. In order to achieve this, Section 96(3) must first be repealed. If it is not, the present voucher system cannot be ended. Subject to parliamentary approval of this order, it is proposed that payments in cash will start for all asylum seekers supported by NASS from 8th April.
	In the short term, these payments will be made using the existing system for the issue of vouchers. It is our aim to use the new application registration card as a means of identifying those eligible for receipt of payment. We have decided to introduce cash payments now for two reasons. First, we believe that the change to cash payments now will enable us better to manage the transition to application registration card-based payments. Secondly—and, most importantly, for asylum seekers themselves—moving to cash payments now means that they will be able to spend their money where they like and will not be limited to the choice of shops where they could use the vouchers.
	It will be necessary to make consequential amendments to the Asylum Support Regulations 2000. The necessary amending regulations were laid before Parliament on 6th March. I beg to move.
	Moved, That the draft order laid before the House on 25th February be approved [21st Report from the Joint Committee].—(Lord Bassam of Brighton.)

Lord Dixon-Smith: My Lords, this change is welcome. It was always likely that the use of vouchers would prove problematic; and, indeed, that has proved to be the case. It was occasionally embarrassing for individuals, and often created quite unreal and artificial difficulties. As I say, we welcome the proposals. We shall be very happy to see the amended regulations in place.

Lord Dholakia: My Lords, I thank the noble Lord for the explanation he has offered to the House. It is a good decision, and one which we on this side of House certainly welcome. When the Immigration and Asylum Act was debated in this House, the Minister will have noticed that we opposed the voucher scheme. We consistently argued that it was unworkable, and also pointed out that such a provision was likely to disadvantage those who were in receipt of it.
	I have a number of questions for the Minister. However, I do not expect him to have all the answers. If he has not, he can write to me. Can the Minister say what is the precise timetable for the implementation of this statutory instrument? The noble Lord, explained the transitional arrangement and what would be likely to happen, but it would also be helpful to know whether the level of financial support will be the same as that applied to ordinary members of the community. Asylum seekers need to be equated on the same basis. All the organisations concerned with asylum and child care have asked for equivalence. Can the Minister assure me that there will be no slippage, and can he confirm that children will remain on the same rate?
	As regards adults, we note that adult asylum seekers do not have to meet certain utility bills. It would be helpful to know the basis of the decision to restrict payment at 70 per cent, and how it was reached. Further, will the Minister consult immigration and asylum organisations to discuss the appropriate level of payment? Finally, we also need to address the question of what would happen to asylum seekers who do not take the accommodation offered but choose instead to stay with friends or family. We very much hope that their cases will not be prejudiced by such action. It is still cheaper for the state to accept such an arrangement.
	As I said earlier, I do not expect the Minister to have all the answers to my questions. This has been a very sad state of affairs, despite the best intentions of the Government. The system has not worked, but I acknowledge that it took a good deal of courage actually to reverse the original decision. We certainly welcome this move.

Lord Bassam of Brighton: My Lords, I am in the enviable position of being able to welcome the welcomes; indeed, I am delighted that that is the case. I shall try to address the precise points made by the noble Lord, Lord Dholakia. Of course, it is the case that the Liberal Democrats argued that the scheme was unworkable. I am not so sure that it was "unworkable", because other issues impacted upon its implementation. This meant that the Government decided, quite rightly, to move away from the cautious approach of a voucher scheme to a cash-based system. Improvements in technology and the long-term desire to introduce a system of smart cards, and so on, will enable the Government to make a significant impact on the potential for fraud within the system.
	The noble Lord asked about a timetable. It is our intention to introduce cash payments on 8th April. By the end of September it is hoped to start the gradual introduction of the application registration card as a means of enabling asylum seekers to obtain cash payments through their post office. The scheme is relatively simple to follow. At present, asylum seekers will be able to attend the local post office with their book, their chitty, or their slips. In the interim, they will be given vouchers, which they will pass straight back over the counter and receive cash. That is how the process is intended to work. In the longer term, it is the Government's intention to introduce a form of smart card. Those making in-country applications will be able to access that smart card system from the outset.
	The noble Lord, Lord Dholakia, raised a point about utilities and the relationship between those and the adult cash payment rate. The calculation has been made that the discount, the 30 per cent, is approximate to the value of housing accommodation which is fully furnished and has all the necessary utensils and furniture in place. It is felt that 70 per cent is a fair reflection of the true cash need of asylum seekers and that the 30 per cent covers utility payments such as rent and so on. It is assumed that that is all included.
	The noble Lord made a final point about those staying with families and friends. That matter is under review at all times. It is currently the case that a large number of asylum seekers stay with friends and family. It is the Government's intention in the long term to provide an estate so that individual asylum seekers can be properly accommodated and worked with in terms of processing their asylum application. We believe that that is the right way forward. It was announced in the White Paper and it is the Government's desire to proceed in that way, but the noble Lord's point is an important one to reflect on and take on board.
	With those comments and, I hope, having answered the points raised by the noble Lord, I commend the order to the House.

On Question, Motion agreed to.

Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2002

Lord Falconer of Thoroton: rose to move, That the draft regulations laid before the House on 12th February be approved [20th Report from the Joint Committee].

Lord Falconer of Thoroton: My Lords, the regulations were laid before the House on 12th February. They introduce new levels of fees which, if approved, will come into effect on 1st April. They were approved in another place on 6th March.
	The principle which underpins the planning application regime is that individual users and potential beneficiaries of the development control system, rather than local taxpayers in general, should meet the costs incurred by local planning authorities in handling and determining planning applications. Local authorities' work includes activities such as carrying out statutory notification, consultation, and publicity so that interested parties can comment on the development proposal. It also includes writing to applicants and objectors, and the time spent by officers and elected members in considering a case.
	The Government's policy is that, in aggregate across England, the income generated by planning application fees should cover the estimated total costs incurred by local planning authorities. Income and estimated costs have been monitored annually to inform decisions about the level of fees. Fees were raised gradually over a number of years until, in 1997, they recovered what was thought to be all of local authorities' estimated costs of determining planning applications. There has been no increase in fees since then because there has been no hard evidence on which to base a further change.
	However, as the basis for estimated costs dated from a 1992 study, my department commissioned research in June—the year given in the briefing is 2002, which cannot be right; it must be 2001—to look afresh at the extent to which the costs incurred by local authorities is being recovered by the fees paid by applicants. This included a comprehensive survey of local planning authorities. It concluded that, in aggregate, income is about 14 per cent adrift from costs for most local planning authorities.
	The Government therefore propose an increase of approximately 14 per cent in fees so that, in aggregate across the country, local authorities' fee income better matches the cost of determining planning applications. This is an interim measure, pending a fundamental review of the fees regime announced in our planning Green Paper.
	The increase in fees proposed in the draft regulations before the House keeps planning application fees at a modest level for developers, while enabling local authorities to recover a fair proportion of the costs incurred. I commend the regulations to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 12th February be approved [20th Report from the Joint Committee].—(Lord Falconer of Thoroton.)

Baroness Hanham: My Lords, I have little to say on this matter save to welcome the regulations. As a present member of a planning committee, I know that the increase in fees will be welcomed. Even more welcome in the not-too-distant future will, I hope, be the wider review of planning fees and the possibility that they will not be restricted and work on a ceiling basis. That would have a great deal of merit, bearing in mind that there will be different associated costs in different areas.
	I am sure that at some date we shall debate the Green Paper on planning. I want to mention the important element that in some boroughs a great deal of time is spent on discussion by officers on an application to bring it through to a satisfactory development. Sometimes, that takes longer than the normal time-frame that would be expected. In the end, it usually results in a far better development. The fees will contribute to only a small extra amount of officer work, but the addition can only be welcome. That is all that I can offer the Minister at this stage.

Baroness Hamwee: My Lords, the dinner hour business seems to have provoked a great outbreak of amity in the Chamber! I, too, want to thank the Minister. I declare an interest as president of the Town and Country Planning Association.
	The Minister referred to the fees covering the cost. Incidentally, his honourable friend told another place that the research was commissioned in June 2000. I do not suppose that that alters the effect of the research itself. I find it difficult to believe that that is the case. Perhaps I should have warned the Minister about this question. There is no confirmation, but I wonder whether that includes forward planning as well as development control. It does not seem to me that that can possibly be the case. That whole area of planning work—developing UDPs, the new development framework, action plans or whatever it will be—is vital to underpin effective development control.
	A constitutional issue arises; namely, whether planning is a public service and whether it should be paid for by applicants. It is in everyone's interests that the outcome is a good one. There seems almost to be a view—I do not suggest that it is shared in this Chamber—that all development is bad. That is perhaps a matter for our debate on the Green Paper, the issue of tariffs and so on.
	Clearly, there are some developments—particularly potentially lucrative commercial developments—where the cost is disproportionate, even to the fee that will be charged under the new arrangements. There is a distinction to be drawn between such applications and residential applications. A development should carry far more of the cost.
	I hold the view that it should also be possible for local authorities to charge for pre-application advice. That is probably because the case of Richmond Upon Thames ex parte McCarthy and Stone is written on my heart—or possibly still sticks in my throat.
	It is the case that planning departments up and down the country are under-funded and under-staffed. Anything that can be done to rectify the situation will be very welcome. As the noble Baroness, Lady Hanham, said, these issues and many more are raised by the Green Paper. For the moment, I do not oppose the order.

Lord Falconer of Thoroton: My Lords, I am grateful for the comments of both noble Baronesses. Perhaps I may deal with the point raised by the noble Baroness, Lady Hanham, about discussions with officers which continue for some time. It is similar to the point raised by the noble Baroness, Lady Hamwee, about pre-application discussions. They are important; they are beneficial. They are not charged for. Current legislation does not permit local authorities to charge for this facility. We recognise the benefits of such discussions. They can help guide the applicant through the process, they can improve the application, and can result in better quality applications.
	We recognise as well the resource burden that this places on local authorities. We intend to enable local authorities to levy appropriate charges for this service. It does not bring the comfort that the noble Baroness would have hoped for in relation to the decided case to which she referred, but I believe it deals with the principle.
	I thank the noble Baroness, Lady Hamwee, for correcting me. The research was commissioned in June 2000. She asked whether there was research on costs being recovered in relation to development planning activities as well as development control. There is not; it was only in relation to development control. She then wondered whether planning was such an important function that one should seek to recover all the costs from the applicants. As I have said, that relates only to development control rather than development planning. She also correctly pointed out that some substantial applications are made by well funded developers for which significantly greater application fees could be paid. That would probably be welcomed by the developers if it had the effect of improving the culture of planning.

On Question, Motion agreed to.

Lord Grocott: My Lords, I beg to move that the House do now adjourn during pleasure until 8.35 p.m.

Moved accordingly, and, on Question, Motion agreed to.
	[The Sitting was suspended from 8.11 to 8.35 p.m.]

National Health Service Reform and Health Care Professions Bill

House again in Committee.
	Clause 1 [English Health Authorities: change of name]:

Earl Howe: moved Amendment No. 14:
	Page 1, line 5, leave out from beginning to "Health" and insert "From 1st April 2003,"

Earl Howe: In moving this amendment, my principal purpose is to provide the Minister with an opportunity to flesh out in more detail than we currently have the thinking behind the far-reaching structural changes that the Bill proposes for the NHS. In the process, however, I should like to raise some major question marks over the wisdom of these changes.
	The restructuring of the NHS that the Government are proposing was foreshadowed in the document Shifting the Balance of Power, published just over 18 months ago. I am the first to acknowledge the significance of these changes for the internal management of the health service. They will entail considerable upheaval for those who administer and run the service—the biggest upheaval for more than 25 years. Their ostensible purpose, if we take our cue from what Ministers have told us, is to devolve power and decision-making downwards from Whitehall, to create shorter chains of command, to introduce greater local responsiveness within the service and to cut bureaucracy. All those objectives are entirely laudable. The question we need to pose as we go through Committee is whether and to what extent the Bill will achieve them.
	The Bill places a duty on the Secretary of State to create strategic health authorities for the whole of England. Our understanding is that there will be 28 SHAs, whose function will be to guide and oversee the development of local health services and to performance manage PCTs and NHS trusts under individual performance agreements. At the same time, as we know, the creation of primary care trusts is to be accelerated, and it is PCTs, not strategic health authorities, which will be made responsible for the commissioning of healthcare services. Above the SHAs will remain the regional directors, whose remit will extend over a very much wider area than that of each SHA.
	The obvious point to note about this structure is that, far from reducing the tiers of authority within the NHS, it is actually increasing them. Instead of two tiers, we shall have three. Furthermore, because there are going to be a great many more PCTs than there currently are health authorities, the actual number of health service bodies is going to increase as well. I am rather worried about the implications of that structure in terms both of the numbers of managers and administrators that it will require and the associated costs of that management. The costs, of course, are not simply financial; they can also be measured in terms of the time of trained doctors and clinicians that will be taken up in performing non-clinical duties. However, given that we accept that that is a price to be paid for the PCTs, which do have much to recommend them, where does it leave strategic health authorities? We are told that each SHA will be responsible for a population of roughly 1.5 million people, equivalent to perhaps three or four existing health authorities now. What is the rationale for that size of purview?
	The BMA, among others, has expressed the worry that all this structural change—which we were promised by Frank Dobson would not happen when the Government first came to office—is going through too rapidly.
	There is a strong feeling that, if more time can be taken to agree the planned configuration of strategic health authorities and regions, the end result would be a good deal better. A meeting last October of senior representatives from health, local government, and business in the West Midlands concluded that the planned configuration will be too large and too diffuse to engage effectively with trusts, with PCTs and with local authorities. Why should there be 28 strategic health authorities and not 40 or 50? I suspect that there is no fully coherent answer to that. The answer depends on what SHAs are to do. It would be helpful to hear from the Minister a little more about the role that they will play and what the word "strategic" means?
	One of the BMA's concerns, which I share, is that there does not appear to be anyone within the new structure tasked with safeguarding and fostering academic activity. A later amendment deals with this matter in more detail. A debate, last year, introduced by the noble Lord, Lord Walton, most recently brought home to us how vital it is for the good of the health service and for the good of the patients that recruitment and retention in academic medicine should be encouraged. No individual PCT will be capable of performing that function, nor can it be left to Richmond House. If anything is strategic in nature, clinical academic medicine certainly is. What role, if any, is envisaged for strategic health authorities in that regard?
	Perhaps the Minister will tell the Committee what mechanisms are to be put in place to ensure that conflict or divergences of opinion between individual strategic health authorities can be resolved. Given that each SHA is to be tasked with brokering solutions across organisational boundaries of PCTs and must, by definition, do the best that it can for the local population that it serves, what degree of latitude can there be for a strategic health authority to compromise on what it sees as an optimum solution, merely because there are objections from the strategic health authority next door? The statutory duty for NHS bodies to co-operate does not appear to be enough in those circumstances because, under the situation that I have described, we would be dealing with two opposing and conflicting views of what is strategically best for an area.
	The amendment makes a serious proposal, but it carries with it a great number of questions about the role that strategic health authorities will play in practice. I beg to move.

Lord Hunt of Kings Heath: I am grateful to the noble Earl, Lord Howe, for introducing the debate on strategic health authorities and, more generally, on the new arrangements that we are putting in place. I need to refer back to the speech made by my right honourable friend the Secretary of State for Health, the shifting of the balance of power speech on 25th April 2001, as mentioned by the noble Earl. That set the broad intent of our direction. There is the reduction in the number of health authorities by about two-thirds by 2002. Some 28 new health authorities are to provide a strategic overview and to take forward some of the functions, including performance management, previously fulfilled by regional offices, with much of the planning and commissioning work previously carried out by health authorities passing to primary care trusts. As we have already commented, by 2004, the intention is that they will be controlling over 75 per cent of NHS funding.
	There is also the disappearance of NHS regional offices, and the introduction of four directors of health and social care, who together with small groups of staff will work closely with the Government Offices for the Regions, focusing on managing health and social care through regulation, arbitration and resolution. I do not see the four directors of health and social care, alongside the small groups of staff who will work with them, as being an additional tier of management in the health service. Essentially they will be a part of headquarters, part of a central department of health, but, if you like, with a desk responsibility for one part of the country.
	On that basis, I argue that we are not, as the noble Earl has suggested, continuing with three tiers. We are reducing to two tiers; the central tier being the strategic health authorities and beneath them the NHS trusts and the primary care trusts. Within that context I believe that strategic health authorities will have an important role to play. They will have responsibility for the strategic framework and the delivery of services across all NHS organisations. They are to ensure strong, coherent, professional leadership and the involvement of all professional groups. I believe that issues concerned with academic medicine in universities fit well within that remit in terms of the relationship between strategic health authorities, professional groups, universities and academic disciplines.
	Importantly, strategic health authorities will be responsible for performance, managing NHS trusts and primary care trusts. They will account to the Secretary of State for performance of the NHS in their areas, so they will be the leaders of the NHS within the strategic health authority boundaries. They will deliver agreed progress on the NHS plan through performance agreements with individual trusts and primary care trusts. They will manage performance across organisational boundaries and networks to secure the best possible improvements for patients. They will intervene to broker solutions where problems arise between local NHS bodies.
	I believe that that answers the point raised by the noble Earl, Lord Howe. Clearly, in decentralising two primary care trusts, we expect them to take a major leadership role. In some cases they will work on behalf of other primary care trusts. Later we shall debate the commissioning of specialist services. It is likely that within one strategic health authority area, one primary care trust will take on the lead role of commissioning specialist services.
	It is possible to envisage that there may be an individual primary care trust that is not prepared to buy-in to the cost and the agreed programme for the commissioning of specialist services. In that case the strategic health authority would have a role to bang heads and ultimately to performance-manage primary care trusts to ensure that everything worked together. There may be many other examples where an individual primary care trust has taken a leadership role. The strategic health authority will be there as a backstop to intervene if matters do not go well or if there is a problem in agreeing an overall solution across the strategic health authority boundary.
	There are two other important roles for strategic health authorities. First is the preparation and delivery of strategies for capital investment. The second is workforce development. It is important that the local health economy, covered by the strategic health authority, is exercised about its future workforce requirements and ensures that it plans the right numbers, commissioning the right number of training places. Information management is another area where we shall expect strategic health authorities to take a strong leadership role.
	I believe that there is a clear differentiation between the kind of role envisaged for primary care trusts and NHS trusts and strategic health authorities. I have no doubt that the strategic health authority role will be invigorating. We know that we have attracted people of the highest calibre as chief executives designate to lead those strategic health authorities.
	Having said that I fully accept that there are those in the service who worry about the pace of change and about the management load that will be placed on the new strategic health authorities and on primary care trusts.
	We are setting a challenging programme and timetable. But if one looks at practice in the health service, one of the complaints often raised is that it takes a long time for structural change to take place; certainly much longer than in the private sector.
	Once the Government have set out their strategic direction, the best possible course of action is to move as quickly as possible to the new arrangements. I am absolutely confident that the people we have appointed are ready to accept that challenge.
	The noble Lord has not as yet raised the issue of primary care trust capacity. I suspect that we shall come on to that. But I repeat—although I know that the noble Earl, Lord Howe, has some concerns about this—that all my experience suggests that the health service will rise to what I believe will be a very invigorating challenge.

Baroness Masham of Ilton: The Minister has just said that it is possible that strategic health authorities will organise specialist services such as supra-regional services. The word "possible" is worrying because it means that it is not yet organised. Therefore, the amendment of the noble Earl, Lord Howe, to delay the matter for a year may be a good idea.

Lord Hunt of Kings Heath: I will need to read Hansard. But I think that I raised the possibility of a problem with a specialist commissioning of services. If one primary care trust in a health network is not prepared to play ball with the general thrust of the agreement within a locality, the strategic health authority would have the opportunity to intervene and bang heads together.
	So far as concerns specialist commissioning, we intend to continue with national specialist commissioning arrangements. The regional commissioning arrangements would be undertaken at local level. It will be a primary care trust responsibility. We would expect them to work together. They would be performance managed by strategic health authorities. I know that we shall come to a later amendment on that issue.

Earl Howe: I thank the Minister for that helpful reply. It has certainly considerably enlarged my understanding of the role of strategic health authorities.
	It was good of the Minister to acknowledge that there is concern in some quarters of the health service about the speed of change. That applies in larger measure, perhaps, to the creation of primary care trusts than to strategic health authorities, although I think that it is true there also.
	The Minister did not really address my point about the size of the remit that strategic health authorities will have in terms of population and why that particular size had been chosen.

Lord Hunt of Kings Heath: I apologise to the noble Earl for not responding to that question. Clearly, a number of factors must be taken into account in relation to the size of a strategic health authority boundary—for example, geography and population. There is a variation in population size between the largest and the smallest strategic health authority. But one of the most important considerations has been to try to build them as much as possible around care networks.
	We recognise that, for example with cancer, for a largish population there is a requirement for an integrated service where primary, secondary and tertiary care elements all have a role to play. It is appropriate that the strategic health authority boundary, by and large, covers the kind of area required for a fully-fledged care network. That means that for a strategic health authority working for a primary care trust one could plan an integrated approach for services. Of course other factors, such as geography, population and size, also come into play.

Earl Howe: Again that was very helpful. I am particularly glad to hear that a flexible approach is being adopted in the department. That is surely right.
	My noble friend Lady Noakes will have a number of other questions to ask on the subject of strategic health authorities later on. For now, I thank the Minister once again for what he has said. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Clement-Jones: moved Amendment No. 15:
	Page 1, line 6, leave out "areas" and insert "regions"

Lord Clement-Jones: In moving Amendment No. 15 I shall speak also to Amendments Nos. 16 to 28, 30, 32 and 33, 37 to 40, 44, 46 to 48 and 50.
	I was interested to hear what the Minister had to say when speaking to the last amendment, but the key question with regard to Clause 1 still remains: why are strategic health authorities being set up that bear little or no relationship to local government boundaries or the government's own regions for other government departments?
	His rather circular argument about care networks was also interesting: the strategic health authorities being set up in an area where it is possible to build a care network. I thought that that was almost a self-fulfilling prophesy: if one decides that that is an area where one can build a care network, one builds one. I do not think that I am being unduly sceptical about that particular choice of words by the Minister, but it would be helpful to have a little more rationale about precisely why 32 strategic health authorities are being chosen.
	As we heard earlier in the debate, over the years there have been a massive number of changes to the structure of health services. I do not have the pedigree of the noble Earl, Lord Howe, to go right back to the 1948 era. I start only at 1974. We started with area health authorities. Then there were district health authorities. Then in the early 1990s we moved back into area health authorities. Now, we are going to have strategic health authorities which will cure all known organisational ills. The one constant—that is why I go back to 1974 rather than to an earlier period—has been the NHS region. Although there have been some changing of boundaries and consolidation, there is no doubt—this is something which is very familiar to health professionals—that we need critical mass at regional level, and in particular there is the need for specialist commissioning at regional level.
	Many professionals have concluded that the Government's current legislative proposals to devolve NHS commissioning responsibility to PCTs in particular could lead to a deterioration in the national provision of specialised services. Their proposals to create a series of PCT consortiums to commission these services is seriously flawed because of their failure to guarantee that these consortiums will have a sufficient number of local PCT members to provide for viable services. That is part of the reason for the proposals by my noble friends on these Benches for a regional, as opposed to a strategic health authority, basis for re-organisation.
	In January 2002, the Department of Health published its revised proposals on specialist commissioning in Shifting the Balance of Power: The Next Steps. The document sets out how PCTs are expected to commission local services, both primary and secondary. Despite being billed as the definitive expression of government policy, it does not contain any mechanism for guaranteeing that local commissioning consortiums will have a sufficiently large membership to be viable. That is another reason for regional commissioning.
	The proposed system of PCT consortiums could lead to a substantial disruption in the provision of specialised services, as PCT boards decide that local relatively low cost, high volume services are a greater priority for investment than membership of consortiums with high cost, low volume treatments—precisely those specialised tertiary care areas of commissioning which are so important. That confused picture is of concern because the new system hinges on the good will of the new PCTs. The existing consortiums have had mixed success in attracting health authorities to their membership—even though LHAs have a tradition of strategic planning for specialised services. The problem is likely to be exacerbated by devolution to PCTs, which will undoubtedly have a steep learning curve.
	That illustrates the problems of not having a clear regional basis for organisation. Another key benefit of regional organisation is that it would cover enough territory to take a strategic view of regional health services in general. Under the new strategic health authorities, there would be problems with coterminosity that would not exist regionally.
	It is important also that public health strategy is dealt with at an appropriate level—such as regionally. In the Act that established the Greater London Authority, health promotion and public health were specifically mentioned—showing that the region is considered an appropriate level.
	There will be nine regional directors of public health but they will not be bolted on to any regional structure. They will be without regional health authorities to which they can relate—though they will be better placed in terms of having an individual economic region used by other government departments than the four regional directors of health and social care, who will not bear a relationship with any natural or local government boundary.
	Somewhat perversely, the Government have chosen anything but a logical and sensible boundary for the reorganisation of health services. Despite the Minister's comments, if the four regional directors are not another layer of management—the noble Lord mentioned performance management—what are they? If they do not have a function, should they exist in the first place? Either they are a layer of management, have a purpose and a set of objectives or not—in which case, they should not be there. They will each be paid a salary for an inadequate job.
	Above all, it is vital to ensure proper accountability for a health strategy that ties in with a known and familiar structure. That could be secured through a regional organisation. In a strategic sense, that accountability is unlikely to be secured any other way. The current scheme of reorganisation, as with so much in the Bill, is half baked. I urge the Government to think again. I beg to move.

Baroness Finlay of Llandaff: I am unclear where current statutory functions, such as the inspection of nursing homes and duties in relation to the protection children, will lie if there is no coterminosity with local authority boundaries. Who will carry responsibility where the boundaries are blurred?

Lord Clement-Jones: There would be far greater coterminosity under the regional proposals than there could be with any strategic health authority boundaries. To that extent, I hope that the noble Baroness is entirely satisfied with the scheme from these Benches.

Baroness Masham of Ilton: I am rather suspicious about the four care authorities. Does that arrangement mean that people might have to pay for their needs? At present, under the health authority, they do not have to pay. Under social care, there is a means test. Some individuals desperately need certain aids—particularly severely disabled and elderly people. Otherwise, they will get into real difficulties.
	I asked "Why strategic?" on Second Reading. The word "strategic" may not be as well understood by the local population as the word "region".

Lord Hunt of Kings Heath: I did not think that I would ever hear a speech in which the idea of bringing regional health authorities back into existence would be met with such enthusiasm. I well remember a debate in another place in the late 1980s in which RHAs survived by two votes. It almost brings tears to my eyes to know of the enthusiasm with which some of your Lordships regard regional health authorities.
	My experience is that RHAs were uncomfortably placed—too far from the coal face and too large, given the areas and populations that they covered, to be particularly effective. The great advantage of strategic authorities is that they are large enough to deal with some of the strategic issues that I mentioned in the previous debate but not so large as to be removed from the public that SHAs exist to serve.
	Strategic health authorities do follow local government boundaries, and the consultation process supported that; and SHA boundaries are consistent with those of the government offices in the regions. Trying, as ever, to pull together the needs of the NHS with the requirement for consistency across governmental boundaries, we have got as close as we can to a sensible arrangement.
	The noble Lord felt that the directors of health and social care would have little work to do. I fear that he has misunderstood my point. I was answering a point made by the noble Earl, Lord Howe, when he suggested that with the new arrangements we would end up with three tiers of management. I said that the four directors of health and social care and the staff to work to them should not be seen as another tier—an intermediate tier, as it were—between the Department of Health and the strategic health authorities.
	The directors of health and social care will be senior officials of the department and should be seen as occupying a headquarters function. They will be on the board of directors. It is simply that, as part of their major responsibility, they will have oversight of one part of the country's National Health Service. They will have a vital role to play. For example, as part of a national programme they will be managing the appointment, development and succession planning of all senior NHS management staff; they will support Ministers through case work visits and local intelligence; and they will be trouble-shooting. Importantly, they will bring the NHS and social care together. There is great advantage in bringing the two together under one person. To take an issue that we know well, the interrelationship between the NHS and local government, the new structure is likely to encourage a much more integrated approach to performance management.
	I assure the noble Baroness, Lady Masham, that creating directors of health and social care will have no impact on the question of means-tested payments, or whatever, for personal social care. The NHS is free at the point of delivery. There will be no impact on those traditional arrangements.
	The answer to the question of the noble Baroness, Lady Finlay, about regulation of the institution that she mentioned is that that will become the responsibility of the National Care Standards Commission. It will be the responsibility of that authority, which will take over the present responsibilities of health and local authorities.
	The noble Lord, Lord Clement-Jones, mentioned commissioning of specialist services as an example of the need for a region. We shall debate that later, but I assure him that national specialty commissioning will continue to be undertaken at national level. I am confident that the kind of specialty commissioning that needs to take place at more local level will be undertaken effectively by primary care trusts, with the back-stop that if there are problems the strategic health authority will have a role in intervening and performance managing those trusts.
	We do not need regional authorities in the new structure. Strategic health authorities provide the right balance between strategy and closeness to the population and will serve us well in taking forward NHS reform.

Lord Clement-Jones: I thank the Minister for that reply. I am delighted to note his enormous confidence in the new structure, which, as will become increasingly apparent in our debates, is not shared by many others. The Minister's point was that regions are too large to be effective. It is somewhat perverse that, alone among government departments, the Department of Health has decided that the region is not an appropriate unit of management or strategy. Every other department has chosen the region as its unit; government offices are testimony to that.

Lord Hunt of Kings Heath: The noble Lord has reminded me that I did not respond to his earlier point about public health. Clearly in public health it is important that there is a strong relationship between the NHS and the regional offices of government. That is why there will be a public health specialist who will work both to the directors of health and social care and to regional government offices. That is a good illustration of the flexibility of the arrangements which, while preserving the integrity of the NHS boundaries to serve NHS purposes, will none the less allow for integration and joint process with regional government offices.

Lord Clement-Jones: I am delighted that at least in one respect the Government accept that argument. I wish that they accepted it for the other 80 per cent of the health service. These public health directors will be rather lonely creatures. They will have no other health professionals to whom to talk. No doubt they will talk to their fellow officers in other disciplines in government offices, but it will be rather peculiar that there will be no other health professionals to advise them or to whom they can relate.
	However, without elaborating too far, it seems somewhat strange that the Minister regards the suggestion for regions as being too "remote" to serve the public interest. In strategic terms, that is the word the Minister wishes to use. Technically, I am sure the noble Lord is right. It is possible to say that the strategic health authorities follow local government boundaries. If one draws a line around two counties, or four unitary authorities, it follows local boundaries. The regional understanding is not followed in the catchment areas. I am certain that after a period of years we shall find 32 moving to 15, 9, 10 or whatever; but they will be more regionally based than today.
	I accept to a degree what the Minister says about the four directors of health and social care. Of course, we on these Benches welcome any gathering together of health and social care. Indeed, I recall putting forward amendments to numerous Bills introduced in this House providing precisely that, rather than the partnership arrangements first proposed by the Government in the Health Act 1999. We argued strongly for integration. It was delightful that two years later the Government put forward proposals for care trusts which we supported. It goes with the grain of our thinking.
	However, the four directors of health and social care who fit into no known region are to take a strategic view without relating to any set of organisations. Yet within the structure of the NHS they are also accountable to the chief executive. That is another layer of management. No doubt the Minister sees it somewhat differently.
	I believe that the strategic health authorities will not be strong enough to withstand micromanagement from the centre. That is the key argument. If regional authorities are properly staffed, with properly specialised skills, one will have people of sufficient seniority and expertise to pursue robustly policy in health services in their areas and at the same time to resist micromanagement from the centre.
	The government proposals are unsatisfactory. This debate has been an opportunity to hear the Minister's enormous confidence about the new structure. For that I am grateful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 16 to 28 not moved.]

Earl Howe: moved Amendment No. 29:
	Page 2, line 21, leave out "are" and insert "is"

Earl Howe: I can deal briefly with the amendment and speak to Amendment No. 34.
	In two places, the clause has a plural verb with a single subject. My suggestion to the Committee is that we correct the syntax. I beg to move.

Lord Hunt of Kings Heath: It is an enormously important amendment. I am advised that there are different views as to whether a body which consists of a number of persons should be treated as singular or plural. For example, some people say "the Government is" and others "the Government are". Neither is wrong; it is a question of style. The important point here is that Clause 1 amends existing legislation: the National Health Service Act 1977. The 1977 Act refers throughout to a health authority as a plural body. For instance, Section 16C(1) states:
	"Every health authority will make arrangements with a view to securing that they receive advice appropriate for enabling them effectively to exercise the functions exercisable by them".
	Section 8(4)(d) states that the Secretary of State may by order change the name by which a health authority are known. The wording in the current Bill follows the same convention in the Act we are amending. I hope that the noble Earl feels that that is a satisfactory explanation.

Lord Turnberg: Before the Minister sits down, is it not the singular name which is at fault? The Bill states that the Secretary of State may by order,
	"change the name by which a Strategic Health Authority or Health Authority are known".

Lord Hunt of Kings Heath: We are following the conventions set out in the 1977 Act in which the words "by which a health authority are known" are used.

Earl Howe: Is the Minister satisfied that this is a consistent feature throughout the Bill? It seems extraordinary to me. In ordinary language we simply do not say "a health authority are". We say, "a health authority is". I know that we speak of the Government in plural terms. That is perhaps a different case; it is a collective noun for a number of people. A health authority is a single body; it is a constituted legal body. As such, it is grammatically singular.
	It seems extraordinary that this should occur. Is the Minister satisfied that it is not just a slip-up and that it is consistent throughout?

Lord Hunt of Kings Heath: The point is that, if it is a slip-up, we are being consistent in slipping up. The noble Earl, Lord Howe, has raised a vitally important point. My understanding is that we are being entirely consistent with the 1977 Act. Of course, I would be happy to examine the matter again. No doubt, we will welcome a return to it on Report.

Earl Howe: I shall not ask the Minister to spend a lot of his time considering it. However, it is interesting that a primary care trust should be treated as a singular noun in the Bill, whereas a health authority is not. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 30 not moved.]

Earl Howe: moved Amendment No. 31:
	Page 2, line 27, at end insert—
	"( ) Regulations made under subsection (5) shall include the requirement for consultation with health professionals, local authorities, bodies representing patients and such other interested parties as the Secretary of State considers appropriate."

Earl Howe: It is a commonplace in Committee for amendments to be tabled that propose a requirement for consultation and the substitution of the affirmative resolution procedure for the negative. Nevertheless, in moving Amendment No. 31 and speaking to Amendment No. 35, I make no apology for following that well worn path. I hope that the Minister may be persuaded to follow my lead and my argument.
	In this part of the clause, we are dealing with a substantial power to be conferred on the Secretary of State. It is the power to establish a new strategic health authority, vary the area of a strategic health authority or abolish a strategic health authority. Any of those things would constitute a significant change in the structure of the health service. Despite the Minister's helpful explanations this evening, the clause is an empty box.
	When the Bill was debated in another place, the Government helpfully conceded that there should be provision for consultation before a strategic health authority order could be made. When it arrived, the amendment looked rather odd. Subsection (5) of the new Section 8 gives the Secretary of State a power to make regulations about consultation. We are usually assured by Ministers that what may seem to be a permissive power is, in practice, a requirement. However, here we also have the uncommon addition of the words,
	"and if he does make such regulations".
	The subsection has a more than usually permissive and discretionary ring to it. It also says nothing at all about who will be consulted. With any major change, such as the one we are discussing, there will be a wide range of interested parties, not only doctors, nurses and other healthcare professionals but local authorities which may be directly affected, voluntary organisations and, of course, patients. The patients are, perhaps, especially important. We would do well to remind ourselves that decisions on who plans and directs services can have a major effect on what services are provided and where. Such questions are important to local communities. At present, CHCs have a right to be consulted by the Secretary of State on reorganisation in the health service. I hope that the Minister will take the opportunity to confirm today that regulations for consultation will be drawn up soon and that he will be able to flesh out the detail of those regulations.
	I turn briefly to the question of parliamentary procedure. If we leave the procedure as it is, Ministers will be able to alter fundamentally the size, remit or even the existence of a strategic health authority, with only a small chance that another place will have an opportunity to debate and, therefore, contest what is proposed. There is less of a problem in this House with finding debating time for a prayer to annul. In another place, as we know, life is different, and only a fraction of the number of prayers to annul result in a parliamentary debate. It would be possible, therefore, with the barest minimum of parliamentary scrutiny, for a Secretary of State to amalgamate two or more strategic health authorities and in doing so radically alter the relationship between an SHA and the PCTs for which it had responsibility.
	I am uncomfortable with that prospect. It may be that after consultation there is general agreement on the proposal, in which case an order would be likely to go through more or less on the nod. But it may equally be that the scheme contains controversial features on which a debate in Parliament should be guaranteed to the Opposition party. It is for that reason that I tabled Amendment No. 35.
	I hope that the Minister will be sympathetic to the amendments and the reasons for them. I beg to move.

Lord Clement-Jones: I support the noble Earl in these two amendments. As he said, the way subsection (5) is worded is extraordinary,
	"and if he does make such regulations".
	I read a letter from Hazel Blears to my honourable friend Dr Harris in the Commons which makes the consultation procedures generally no clearer. I have a letter which deals with the mechanism for consultations above strategic health authority level and with the arrangements for consulting on the decision of strategic health authorities to delegate functions to PCTs. All of that appears to be vague and discretionary. It is therefore an absolutely valid point to make that it should be written on the face of the Bill.
	We have had discussions in the past, certainly when the Health Bill went through, on the nature of consultations. Of course the Minister does not like lists—none of us likes lists—but general duties on consultation should at least be clear. There should be some prescription as to how they are carried out. There is little in this Bill and that is one of its flaws.

Lord Hunt of Kings Heath: One thing the National Health Service could never be accused of is undertaking too little consultation. I hope that I can reassure the Committee that consultation will be effective in the matter of strategic health authorities in the future.
	As the noble Earl, Lord Howe, suggested, this new section was inserted in another place. It effectively ensures that provision will be made for consultation in respect of the names, boundaries and mergers of strategic health authorities. I make it clear that the Minister, in moving that amendment, gave an undertaking that the Secretary of State would make regulations on the matter.
	Given the level of detail required, it is appropriate to deal with this issue by means of regulations rather than on the face of the Bill. That will have the effect of ensuring that consultation on strategic health authorities is broadly in line with consultation requirements for other NHS bodies such as primary care trusts and NHS trusts, the detail of which is also set out in regulations.
	Making provision for consultation requirements is in line with many of the other provisions in the Bill. If power and resources are to be devolved to front-line organisations, it is only right that those organisations, together with local partners, patients and the public, should be consulted on changes to the health service.
	As I indicated, the exact scope of any consultation requirements will be a matter for regulations. What we currently have in mind is that consultees might include local NHS trusts, primary care trusts, neighbouring strategic health authorities, staff representatives, voluntary organisations, local authorities and patient forums. I hope that, having given the general intent of the Government, the Committee will agree that Amendment No. 31 is unnecessary and are reassured that the Government will ensure that the consultation is appropriate and as wide-ranging as I suggested.
	As regards orders made under this subsection, they would contain a high level of detail concerning the proposed local arrangements. I do not believe that a case has been made that in the circumstances surrounding strategic health authorities there is a need for the affirmative resolution procedure for every order made under this particular subsection. It does not seem to me that that is proportionate. One has to remember that any orders made will already have been subject to local consultation. Obviously, that would have allowed for a great deal of discussion and input at local level. It seems to me that as regards parliamentary scrutiny we have the balance about right.

Lord Clement-Jones: Perhaps I may probe a little further regarding particular mechanisms. I accept the generality of what the Minister says. For example, in the Minister's letter to my honourable friend she says,
	"Mechanisms for consultation above strategic health authority level. This is an important issue and one that is provided for in existing legislation. The NHS Act 1977 provides for the Secretary of State to direct Strategic Health Authorities to work together to undertake their functions. It is intended that consultation on changes that span strategic health authority boundaries will be undertaken by Strategic Health Authorities working together, and this will be achieved through directions. How this will operate in practice is still to be decided".
	Those are rather important issues. It is not even going to be in the regulations, but by way of direction, as far as I can see. The letter continues,
	"We see benefits in Strategic Health Authorities working together in a federated way, and also a single Strategic Health Authority taking lead responsibility for the consultation exercise".
	We are in very vague territory here.
	I come to a second example, which is arrangements for consulting on the decisions of strategic health authorities to delegate functions to PCTs. Mrs Blears assures my honourable friend that it comes within Section 11 of the Health and Social Care Act 2001. The letter continues,
	"If delegation would not have any impact on services this would make public consultation unnecessary and indeed irrelevant".
	I do not quite understand that. If something is delegated to a PCT, ipso facto that requires a level of consultation. But she goes on to say,
	"We intend to issue practice guidance to the NHS in relation to its duty to 'involve and consult', and it will be this vehicle that is used to make explicit that delegation of functions must be consulted upon where it will impact on the services that are used by the public".
	We are getting into very complicated areas here. It seems rather strange that we have these myriad ways of consultation whereas something in the Bill which is relatively straightforward and over-arching would be preferable.

Lord Hunt of Kings Heath: I am grateful to the noble Lord. One has to draw a distinction here. Clause 1(5), which is the subject of the noble Earl's amendment, refers to the consultation concerning strategic health authorities, their abolition—

Lord Clement-Jones: I recognise that that is very limited and a very narrow duty of consultation on those specific matters.

Lord Hunt of Kings Heath: Indeed. But the point my honourable friend Mrs Blears was making was that there are other sections of legislation which cover the wider area of consultation over services. Her reference to Section 11 of the Health and Social Care Act 2001 is a very good example of that. It states,
	"It is the duty of every body to which this section applies to make arrangements with a view to securing, as respects health services for which it is responsible, that persons to whom those services are being or may be provided are, directly or through representatives, involved in and consulted on".
	The section goes on to describe the area of services on which they should be consulted.
	Surely, the important point is whether the NHS of the future will take a vigorous approach to consultation both over issues such as strategic health authority boundaries and, much more importantly, over the future provision of services. We shall have some enormously interesting debates later in Committee on patient and public involvement. It is fully our intent that the health service should continue to be more effective in consultation and public involvement in service provision. I hope that I have reassured noble Lords that it is the Government's intention to issue regulations in relation to Clause 1(5) to ensure that when it comes to changes in strategic health authorities, there will be full consultation that will cover the sort of organisations and bodies to which the noble Earl, Lord Howe, referred.

Baroness Thomas of Walliswood: I am sorry to continue this discussion but may I bring it down to a mundane level? Subsection (5) is in two halves. If it were terminated after the words, "Strategic Health Authority", it would have exactly the same meaning as it does now. It would not have curious phrases such as,
	"and if he does make such regulations",
	and "requirements (if any)" as it does now. It would say the same as it does now at half the length and without those unusual and complicating phrases.

Lord Hunt of Kings Heath: I am always willing to look again at proposed legislation to see whether we can cut some words from it. The wording is clear. It starts by saying
	"The Secretary of State may make regulations . . . and if he does make such regulations he shall not make such an order".
	However, I am happy to look at the wording again.

Earl Howe: I am a little disappointed at the Minister's reply to my proposal for affirmative parliamentary procedure. I should not have thought that consultation, however wide, should itself preclude the affirmative resolution procedure in Parliament. Indeed, I have never heard of consultation being given as a reason for denying Parliament an automatic right to debate a question. Nevertheless, I note what the Minister said and I shall consider the matter further.
	I am grateful to the Minister for his assurance about making regulations and for setting out the Government's intentions on the persons and bodies to be consulted. I agree with the noble Baroness, Lady Thomas, that subsection (5) has the look of a discretionary power rather than a mandatory one. On the other hand, we have the Minister's assurance on the record, which is a comfort, but the wording does seem somewhat unnecessarily tentative. I am grateful to the Minister for throwing light on this part of the clause and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 32 to 35 not moved.]
	On Question, Whether Clause 1 shall stand part of the Bill?

Baroness Noakes: I rise to oppose Clause 1 standing part of the Bill and, if I may, I shall oppose Clause 7 and Schedule 1 standing part of the Bill because it is convenient to take these together.
	The Minister may have gathered by now that there are several noble Lords who are not enthusiastic about strategic health authorities. Indeed, in opposing Clause 1 standing part, I echo what my noble friend Lord Howe said in moving Amendment No. 14 and what the noble Lord, Lord Clement-Jones, said in relation to Amendment No. 15 and the others in that group.
	We should be under no illusion about the content of these parts of the Bill. With some minor exceptions, they are there to do one thing only, which is to change the name from health authorities to strategic health authorities. To do that the Bill takes the first 44 lines, several lines within Clause 2, 25 lines comprising Clause 6 and six-and-a-half pages of Schedule 1. I suggest that that has wasted the time of parliamentary draftsmen; it was a waste of time in another place when those parts of the Bill were considered; and it is now a waste of time in this Committee. Nothing of substance would be changed by this wasteful legislation. It would be simply changing name plates. With the NHS failing to deliver on all fronts, it is staggering that the Government have wasted so much time to achieve so little.
	All this legislative effort is being undertaken in order that the organisations currently called "health authorities" can in future be called "strategic health authorities". That might be acceptable if they were indeed "strategic" bodies, but several Members of the Committee have already cast significant doubt on that.
	Let us look at what these strategic bodies will do. The paper Shifting the Balance of Power states that the strategic health authorities will have three key functions. The first key function will be to create a coherent strategic framework—but I could not find anywhere in the document what strategy they will be responsible for. As it is clearly the Government's intention that delivery will be in the hands of other bodies—in particular, PCTs and NHS trusts—it is difficult to understand what the creation of a strategic framework will mean in practice.
	Can the Minister say what the creation of a strategic framework will mean in practice and explain how, if the requirement is to deliver these strategies somewhere else, such bodies can create strategies but not deliver them? The Minister referred earlier to strategic health authorities "banging heads together", but I am not quite sure how strategic that is.
	We have already spoken about specialist services—an issue to which we will return later—where again responsibility filters down to the level of primary care trusts, with the rather vague involvement of strategic health authorities. We were told that it is important that care networks should be coterminous with strategic health authorities, but I am not clear what strategic—or, indeed, operational—involvement the strategic health authorities will have with the care network. That is the first key function.
	The second key function is to agree annual performance targets and performance management. I have never seen performance management described as "strategic". It is quintessentially an operational matter and no amount of fancy words can turn it into a strategic activity.
	The third key function is building capacity and supporting performance improvement. It would appear that this will involve matters such as supporting systems development across a number of PCTs, NHS trusts and networks. Is that strategic? I think not. It is simply an operational matter at a higher level. Can the Minister explain how supporting systems development and so on is strategic?
	The question is whether all this amounts to the creation of strategic bodies? It certainly amounts to the creation of smaller bodies, as are the current health authorities, and while smallness might be associated with strategic bodies it is not a conclusive indicator of strategy.
	The Minister referred to the new strategic health authorities being involved in leadership, but the leadership issues seem to concern operational matters. So again I have difficulty in understanding what these strategic health authorities are.
	To call the bodies anything but what they are currently called—that is, "health authorities"—is vanity. There is no substance to the proposed title. I would not object to these bodies being a tier above the primary care trusts and the NHS trusts—that is sensible and would provide local focus—but they would not be strategic in intent or likely effect; they would be simply an intermediate tier.
	By opposing Clauses 1 and 7 and Schedule 1 stand part, we would leave things exactly as they are—health authorities would remain health authorities and that would be an end to the matter. The noble Lord, Lord Clement-Jones, proposed calling them "regional health authorities" rather than "strategic health authorities". I certainly prefer that as a more honest description—although 28 of them would be rather a lot—but that, too, would be a waste of the statute book. I commend my simple leave-things-as-they-are approach to the Committee.

Lord Clement-Jones: I should like to add a brief word in support of what the noble Baroness, Lady Noakes, said. She absolutely hit the nail on the head when she said that the status quo is preferable to anything to be found in this Bill in respect of the structure of this clause.
	We know that in probably a minimum of nine months' time there will be another NHS Bill with further proposals for reorganisation. Whether as a result of the aftermath of Kennedy, the aftermath of Adair Turner, further consideration of the King's Fund report, further inspiration on the part of the Secretary of State for Health, there will be further proposals. These strategic health authorities—I think the noble Baroness has punched an enormous hole through the Minister's rationale for them—have no real substance. They come within the definition of "a rose by any other name". The Minister would do well to put Clause 1 into early retirement and reconsider its structure.

Lord Hunt of Kings Heath: The noble Lord, Lord Clement-Jones, obviously knows more than I do about next year's legislative programme. If we continue at the same rate of progress that we have made today, I suspect we shall still be debating this Bill next year.
	I appreciate the noble Baroness' wide experience of management, particularly in the National Health Service. I did not know that she was another friend of the regional health authorities, but I am glad to welcome her to that rather exclusive club.
	I should like to make two substantive points. First, I agree that one should not indulge in name changing for the sake of it. There has to be a substantive reason for calling strategic health authorities "strategic". I believe that there is. It is a visible sign of a real determination to decentralise the National Health Service. Strategic health authorities will have a much more strategic role than that currently performed by the existing health authorities. It will be a critical role in ensuring that the health service makes the progress that we all want it to make. The strategic health authorities will have a very exciting role. They will oversee the work of local NHS trusts and primary care trusts. They will become the headquarters of the NHS locally. Their chief executives will account both nationally and locally for the performance of local health services.
	In addition to their local work, we greatly hope that the leaders of the strategic health authorities will also play a major role at national level in leading policy development. I believe that the Department of Health would be very well served by having strategic health authority people to lead national programmes of work, inform the department nationally of front-line issues and generally ensure that the closest possible network of communication and learning exists between the department and the NHS at local level.
	The noble Baroness, Lady Noakes, suggested that some of the responsibilities of the strategic health authorities were less strategic and had more to do with operational management. There are two ways of looking at that. I have already listed some of the responsibilities of the strategic health authorities. They would be responsible for the strategic framework; the delivery of services across all organisations; ensuring strong, coherent and professional leadership; performance management; accounting to the Secretary of State for the performance of the NHS in their areas; managing the performance across organisational boundaries; intervening to broker solutions where problems arose, and so on.
	I sense that strategic health authorities are indeed being given strategic leadership of a very significant population, a very significant health community. In addition, they are being given levers in terms of performance management to make sure that the strategic leadership they display is effective throughout the health system within their boundaries. For example, if we had simply said that strategic health authorities were to develop a strategic plan/framework without giving them the levers to performance manage primary care and NHS trusts, we would have ended up with a rather powerless organisation. I believe that we have got the balance right: clearly strategic health authorities are strategic. They also have the ability to ensure that the whole health community is marching in the right direction, with a power of intervention to use when things go wrong.
	I have listened with a great deal of interest to the concerns that have been expressed by noble Lords. However, this is a significant change. It is about releasing power and resources to the front line; maintaining a strategic direction at the SHA level; and providing levers of performance management to ensure that the whole system is working effectively. In that sense, I believe that Clause 1 is an integral part of the Bill and that it should be supported.

Baroness Noakes: Can the Minister say how he reconciles the intention by the Secretary of State to devolve decision making as far as possible to the front line—that is, to primary care trusts—with what he has just described, which, I believe, is retaining as much power as possible at a level above that; for example, levers over performance management, powers to intervene, and so on? Is the noble Lord saying that what makes an organisation strategic here is the ability to interfere in the decisions of the tier to which the Secretary of State claims to be delegating?

Lord Hunt of Kings Heath: No, that is not how I read the situation. The clear intent is to devolve as much as possible to primary care trusts. But clearly there is a balance to be struck here. We are talking about a national service. Just as concerns were expressed earlier about specialty commissioning and how that will develop, we need a mechanism here to ensure that everyone is working together. As for the ability of a strategic health authority to intervene and to broker solutions where problems arise between local NHS bodies, I should expect that to arise very infrequently.
	My experience, derived from my visits to some primary care trusts, is that people are working very well together. However, as part of the strategic leadership that the strategic health authority will carry out, I am suggesting that some levers of intervention may be required. I should expect those levers to be used on a very minimum basis.

Baroness Noakes: If the levers are minimum, can the Minister explain what is meant, in practice, by,
	"creating a coherent strategic framework"?
	On the one hand, I cannot reconcile primary care trusts being given full freedom, while, on the other hand, the strategic health authorities are given responsibilities. It seems to me that there is a confusion between the two levels. I am not clear how a body can develop a "coherent strategic framework" if it does not have the operational responsibility to deliver. I believe I heard the Minister say that that would be achieved by having levers and powers to intervene. However, that means that we are rolling back on the stated intention of this provision as a decentralising measure. It seems to me that we have an illusion of decentralisation for primary care trusts: we have something that we call "strategic", but it is actually a matter of concentrating true decision-making at the level of the strategic health authority.

Lord Hunt of Kings Heath: I do not believe that to be right. There is no point going down this route unless we empower primary care trusts. The purpose of shifting the balance is to get the key decisions about resources and service commissioning down to the primary care trust level where it lies parallel to primary care, which is responsible for making so many of the decisions that influence the whole of the National Health Service network. There is no question that this is a decentralisation measure. Equally, there are issues that go wider than the primary care trust boundaries. Inevitably, in the provision of national health services, when one looks, for instance at service networks and care networks, they often go wider than would be covered by an individual primary care trust.
	The role of the strategic health authority is to ensure that in those circumstances there is an integrated approach, that people are working together and that, if there is a problem, there is an ability to do something about it. That is not a centralising charter. It is getting the balance right between the need to integrate services across care boundaries, but at the same time ensuring that the great bulk of decisions are taken at the primary care trust level.

Baroness Noakes: I thank the Minister for that response. Perhaps I may return to the question that I asked earlier, but not digress into centralisation and decentralisation measures. What is a coherent strategic framework? How shall I know it when I see it in relation to a strategic health authority; and what does that mean for the freedom of action of a primary care trust?

Lord Hunt of Kings Heath: At the moment, strategic health authorities are developing. The designate chief executive will be working, together with the designate chairs of the 28 strategic health authorities, to produce franchise plans. Those plans will set out the key themes and aims of those authorities in their leadership role for the strategic health authority. We have received some outlines, but they are being worked upon. We shall see fuller documentation in the months to come.
	From that, we shall have the overall intent and overall direction of the strategic health authority: the kind of care networks and services that are likely to be delivered, the capital programme, the development of information management and workforce development. That will set the strategic framework.
	Within that, primary care trusts will have a huge role—an expanded role—in the commissioning of services and will take a leadership role in many of the issues that will have to be decided across the strategic health authority boundary. I believe that that approach gets the balance right between the need to pull some matters together within a care network and the need to decentralise as much as possible.

Baroness Noakes: I thank the Minister. I do not think that he will expect the scepticism on these Benches to have evaporated after those words. I suspect that many of us will want to read his remarks carefully. We may well want to return to the matter another day.

Clause 1 agreed to.
	Schedule 1 agreed to.

Lord Filkin: I am aware that the House is sitting tomorrow, and that many of those present will be taking part in those debates. Therefore, there was an understanding that, when it got to 10 o'clock, that might be a good time to adjourn the House. We are about one minute off. Therefore, I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

Commonhold and Leasehold Reform Bill  [HL]

Returned from the Commons agreed to with amendments and with a privilege amendment; it was ordered that the Commons amendments be printed.
	House adjourned at one minute before ten o'clock.